India’s economy to grow at 8 per cent, room for big-bang reforms

Conjuring up a bright picture for the India growth story, the Indian government has projected that the country’s economy will grow at a rate of more than 8 per cent in the 2015-16 fiscal year, while consumer inflation will drop to between 5 and 5.5 per cent.
The Economic Survey report, which was tabled on February 27 in parliament by India’s Finance Minister Arun Jaitley, a day before the NDA-led BJP government’s first full Union Budget, forecast that the Indian economy would grow by 8.1-8.5 per cent under a new calculation method that makes India the world’s fastest growing large economy.
The survey, a big-picture report on the state of Indian economy, also indicated that India can increase public investments and still achieve its borrowing targets.
The survey is clear about the government’s priorities: India needs to stick to its medium-term fiscal deficit target of 3 percent of gross domestic product.
The survey has been prepared by the Finance Ministry’s chief economic adviser Arvind Subramanian on the state of Asia’s third-largest economy.
The survey underlined that India was in foe good times. “India has reached a sweet spot and that there is a scope for Big Bang reforms now,” the report said.
The survey also indicated that economic growth during 2014-15 may scale up to 8 per cent on better farm output. The CSO had projected growth at 7.4 per cent for current fiscal.
“Several reforms have been undertaken and more are on the anvil. The introduction of the GST and expanding direct benefit transfers can be game-changers,” it added.
“In the short run, growth will receive a boost from lower oil prices, from likely monetary policy easing facilitated by lower inflation and lower inflationary expectations, and forecast of a normal monsoon,” the Survey said.

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