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Economic Survey is a reflection of Government’s commitment to growth and development: Dr. Bibek Debroy, Chairman, EAC-PM

Calling the Economic Survey for 2017-18 a reflection of the government’s commitment to  growth and development, the Chairman of the  Economic Advisory Council to the Prime Minister (EAC-PM) Bibek Debroy hailed the emphasis on women’s empowerment describing it a welcome step.

 

Debroy, according to a release endorsed the pick-up in growth highlighted in the survey, but was of the view that in 2018-19 the real GDP growth rate is likely to be closer to 7.5 per cent rather than 7 per cent.

"The government is committed to fiscal consolidation and prudent public expenditure. It would be in order if public expenditure is also financed through off-Budget instruments…"It is rightly mentioned that growth drivers will have to fundamentally emerge through exports, private investments and consumption," he noted.

 

The statement also said that EAC-PM chairman is of the view that the impact of any increase in crude prices will be more than compensated by recovery in exports, private investments and even private consumption, unless real interest rates remain too high. The survey estimates a real GDP growth rate of 6.75 per cent for the current fiscal, based on a 7.5 per cent real growth for the second half of the year. For 2018-19 it projects a real GDP growth between 7 and 7.5 per cent.

 

According to the statement, the survey is also optimistic in its tone because of government’s commitment to carry forward structural reforms like GST, deregulation measures, bank re-capitalization and resolution through the IBC process.

 

With regard to demonetization, the Survey called it only a blip that did not last beyond mid 2017 and it went on to say that despite a lot of general statements on the impact of demonetization and GDP growth, demonetization and GST aimed at increasing the taxpayers base and the Survey has figures to show that the objectives have been achieved though many of these tax payers declared incomes that are close to the minimum threshold levels.

                                                                                             

Noting that there has also been a lot of debate about job growth, despite the lack of credible data, the statement said, "The survey has specific numbers to show that formal sector employment is much higher than what is commonly suggested."

 

The statement of EAC PM concludes referring to the down-side risks and up-side gains: The survey lists out down-side risks and up-side gains that will influence growth in 2018-19. Amongst down-side risks, the most important one is crude oil prices. The Chairman, EAC-PM is of the view that the impact of any increase in crude prices, will be more than compensated by recovery in exports, private investments and even private consumption, unless real interest rates remain too high.

 


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