India's growth steady: survey, Latest Business News - The New Paper

India's growth steady: survey

This article is more than 12 months old

NEW DELHI: India's economy is expected to grow by between 6.75 per cent and 7.5 per cent in the coming fiscal year, the Finance Ministry said in its pre-budget Economic Survey yesterday, roughly in line with this year's expected 7.1 per cent.

The economy should steady after a hit from Prime Minister Narendra Modi's decision in November to scrap most cash in circulation in a strike against "black money" - untaxed wealth and the proceeds of crime and corruption.

The survey's forecasts will underpin Finance Minister Arun Jaitley's annual budget to be revealed today, in which he is expected to offer tax "sops" to voters to soothe the blow to jobs inflicted by the demonetisation. The survey also said government pay rises and muted tax receipts could put pressure on the fiscal deficit in the coming fiscal year.

A sharp rise in prices could also cap the headroom to ease monetary policy, it added.

Senior officials had said that Mr Jaitley may allow the federal deficit to overshoot an earlier target of 3 per cent of gross domestic product (GDP) to create room for public investment.

The report also knocked down a widely touted proposal to introduce a so-called Universal Basic Income, saying it would cost between 4 per cent and 5 per cent of GDP.

It described such a policy as "a powerful idea but not ripe for implementation". - REUTERS