<p> A day ahead of its first full Budget, the Economic Survey on Friday reminded the government that the historic mandate it got in the general elections was meant to unleash “big bang reforms” and that economic growth alone could “wipe out every tear from every eye”.<br /><br />In an apparent reference to easing global oil prices and softening inflation back home, the Economic Survey 2014-15 said that facts and fortune aligned in India’s favour provide a rare opportunity to the government to create avenues for young, middle class and an aspirational India. While projecting a high economic growth of up to 8.5 per cent and inflation lowering at 5.5 per cent in 2015-16, the survey said the improved macroeconomic fundamentals were positive for reforms. <br /><br />It also projected a current account deficit (CAD) of below 1 per cent next fiscal but said restricting fiscal deficit to 4.1 per cent of the GDP in the current fiscal would be a “daunting task”. <br /><br />“As the new government presents its first full budget, a momentous opportunity awaits. India has reached a sweet spot, rare in the history of nations, in which it could finally be launched on a double-digit medium-term growth trajectory.<br /><br />“This trajectory would allow the country to attain the fundamental objectives of wiping every tear from every eye of the still poor and vulnerable,” said the survey, authored by a staunch critic of the Modi-led government’s Budget last year but now its chief economic adviser, Arvind Subramanian.<br /><br />It also cautioned that while the young population provided great opportunities, it also posed challenges for the government in terms of providing them education and employment. <br /><br />Spelling bad news for the government, the survey revealed that a pick up in employment generation in three years from 2009 could not keep pace after 2012.<br /><br />The survey, which documents performance of the government in the previous year and also lays down the road map for the next, also painted a grim picture of government subsidies saying that rich households have benefited more from subsidies than the poor. <br /><br />It has called for a direct transfer of all kinds of subsidies on which a whopping Rs 3.77 lakh crore of tax payers money is spent. On several reforms undertaken by the government, the introduction of Goods and Services Tax and expanding direct benefit transfers could be the game changers, it stated.<br /><br />The survey also took note of the recently launched “Jandhan Yojana”, “Aadhaar” scheme and said linking it to technology-enabled mobile services could change the plight of the poor. It will also enable seamless transfer of subsidies.<br /><br />“The JAM Number Trinity – Jan Dhan Yojana, Aadhaar and Mobile numbers – allows the state to offer this (subsidy) support to poor households in a targeted and less distortive way,” it said.<br /><br />Last but not the least, the survey made a case for liberalising FDI in retail, saying that it would help bridge investment and infrastructure deficits, improve supply chain management and also employability. <br /><br />It highlighted that 58.3 per cent of the country’s population is below 30 years. Around 31 per cent of this population lives in urban areas and with rising disposable income makes it one of the key positives for the future of retail sector.</p>
<p> A day ahead of its first full Budget, the Economic Survey on Friday reminded the government that the historic mandate it got in the general elections was meant to unleash “big bang reforms” and that economic growth alone could “wipe out every tear from every eye”.<br /><br />In an apparent reference to easing global oil prices and softening inflation back home, the Economic Survey 2014-15 said that facts and fortune aligned in India’s favour provide a rare opportunity to the government to create avenues for young, middle class and an aspirational India. While projecting a high economic growth of up to 8.5 per cent and inflation lowering at 5.5 per cent in 2015-16, the survey said the improved macroeconomic fundamentals were positive for reforms. <br /><br />It also projected a current account deficit (CAD) of below 1 per cent next fiscal but said restricting fiscal deficit to 4.1 per cent of the GDP in the current fiscal would be a “daunting task”. <br /><br />“As the new government presents its first full budget, a momentous opportunity awaits. India has reached a sweet spot, rare in the history of nations, in which it could finally be launched on a double-digit medium-term growth trajectory.<br /><br />“This trajectory would allow the country to attain the fundamental objectives of wiping every tear from every eye of the still poor and vulnerable,” said the survey, authored by a staunch critic of the Modi-led government’s Budget last year but now its chief economic adviser, Arvind Subramanian.<br /><br />It also cautioned that while the young population provided great opportunities, it also posed challenges for the government in terms of providing them education and employment. <br /><br />Spelling bad news for the government, the survey revealed that a pick up in employment generation in three years from 2009 could not keep pace after 2012.<br /><br />The survey, which documents performance of the government in the previous year and also lays down the road map for the next, also painted a grim picture of government subsidies saying that rich households have benefited more from subsidies than the poor. <br /><br />It has called for a direct transfer of all kinds of subsidies on which a whopping Rs 3.77 lakh crore of tax payers money is spent. On several reforms undertaken by the government, the introduction of Goods and Services Tax and expanding direct benefit transfers could be the game changers, it stated.<br /><br />The survey also took note of the recently launched “Jandhan Yojana”, “Aadhaar” scheme and said linking it to technology-enabled mobile services could change the plight of the poor. It will also enable seamless transfer of subsidies.<br /><br />“The JAM Number Trinity – Jan Dhan Yojana, Aadhaar and Mobile numbers – allows the state to offer this (subsidy) support to poor households in a targeted and less distortive way,” it said.<br /><br />Last but not the least, the survey made a case for liberalising FDI in retail, saying that it would help bridge investment and infrastructure deficits, improve supply chain management and also employability. <br /><br />It highlighted that 58.3 per cent of the country’s population is below 30 years. Around 31 per cent of this population lives in urban areas and with rising disposable income makes it one of the key positives for the future of retail sector.</p>
