India On Growth Path Says Arvind Subramanian 6.75% Growth Projected
Arvind Subramanian, chief economic adviser in the Finance Ministry had a positive outlook for the country in the forthcoming fiscal year beginning April 1, 2018. As per the Economic Survey which was earlier tabled by Finance Minister Arun Jaitley, growth rate for the coming fiscal year is slated to rise to about 7%-7.5%.
Dr Subramanian who was talking to the media stated that demonetization and GST had impacted the economy for a temporary period but the economy now was being set on the growth path. The last three quarters had seen a rapid rise in the exports of the country. The growth rate projected by the Economic Survey for the current fiscal year was 6.75% as against the 6.5% projection of the Central Statistics Office. Explaining the reasons for the country’s slow growth in the earlier few quarters Dr Subramanian attributed it to the GST roll-out, demonetization effect as well as the increased oil prices and increased interest rate which adversely affected government revenues and consumption.
Dr Subramanian listed the main 2017–2018 takeaways comprising the historic GST launch, capital restructuring of the state-run banks and passing the Bankruptcy code for resolving bad loan issues which was still on-going. Finding a solution to the bad loans issue would lead to a hike in private investment which was otherwise pulling down the GDP according to him. He however, lauded the corrective action that took place mid-course resulting in GST stabilization.
At the same time, he was concerned about the increasing oil prices as well as the increased stock prices. The Economic Survey emphasized the necessity for ensuring policy vigilance in the approaching year more so if the increased global oil prices continued or a sudden correction of stock prices occurred as that would lead to an abrupt arrest in flows of capital.