Economic Survey

Economic Survey

The economic survey, the basis for Jaitley’s budget for the fiscal year starting April 1, forecast the economy would grow by 8.1-8.5 percent under a new calculation method that makes India the world’s top-growing big economy.


The survey was prepared by the finance ministry’s chief economic adviser Arvind Subramanian.


Following are the highlights of the survey:


Fiscal Deficit:

India must meet its medium-term fiscal deficit target of 3 percent of GDP

Government will adhere to fiscal deficit target of 4.1 percent of GDP in 2014/15

Govt should ensure expenditure control to reduce fiscal deficit

Expenditure control and expenditure switching to investment key


Growth :

2015/16 GDP growth seen at over 8 pct y/y

Double digit economic growth trajectory now a possibility

Economic growth at market prices seen between 8.1 – 8.5 percent in 2015/16 on new GDP calculation formula

Total stalled projects seen at about 7 percent of GDP, mostly in private sector



There is scope for big bang reforms now

India can increase public investments and still hit its borrowing targets



Inflation shows declining trend in 2014/15

Inflation likely to be below central bank target by 0.5 – 1 percentage point

Lower inflation opens up space for more monetary policy easing

Govt and central bank need to conclude monetary framework pact to consolidate gains in inflation control

Consumer inflation in 2015/16 likely to range between 5-5.5 percent


Fiscal Consolidation:

Govt remains committed to fiscal consolidation

India can balance short-term imperative of boosting public investment to revitalize growth with fiscal discipline

Outlook for external financing is correspondingly favourable


Current Account Deficit :

Estimated at about 1.3 percent of GDP in 2014/15 and less than 1.0 percent of GDP in 2015/16



Overhauling of subsidy regime would pave the way for expenditure rationalisation



Liquidity conditions expected to remain comfortable in 2015/16



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