Cash ban and rise in oil prices risks to FY 18 GDP growth. There are 3 main downside risks to FY18 GDP growth forecast
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2.
Economic Survey sees FY18 GDP growth in range of 6.75-7.5%. Fiscal windfall expected from banned notes not returned. The survey stated demonetisation is a risk to FY18 GDP growth forecast.
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3.
The Survey stated rise in global trade tensions will be risk to FY18 GDP growth.
Sharp rise in prices in FY 18 may limit monetary easing headroom. Currency shortage to effect supply of some products
4.
The Eco Survey predicted excise related taxes may fall around 0.1% of FY18. GDP
Outlook for GST collections must be cautious and there is a need to seriously consider universal income basic data. The Muted on non-tax revenue and Govt salaries to weigh heavy on FY18 fiscal map
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5.
The Survey stated the agriculture sector is expected to grow by 4.1% in FY18. A fiscal windfall from PM Garib Kalyan Yojana is expected. Currency shortage is likely to affect supply of some farm products. There is a need to modify operational framework of FRBM Act
6.
The Economic Survey tabled by Arun Jaitley stated fiscal gains from demonetisation, GST will take time to realise. The market interest rates is seen lower in FY18 due to demonetisation. The
GDP growth rate at constant market prices for the current year 2016-17 is placed at 7.1%. Current account deficit (CAD) narrowed in the first half (H1) of 2016-17 to 0.3% of GDP
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7.
Inflation is repeatedly being driven by narrow group of food items, pulses being major contributor of food inflation
8.
The survey stated property tax can be tapped to generate Additional Revenue at City Level. Bengaluru and Jaipur collecting only 5-20% of their potential property tax. Benefits of cash ban are-digitalization, greater tax compliance and a reduction in real estate prices
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9.
The survey stated benefits of cash ban to increase long-run tax revenue collections and GDP growth. Cash situation to normalise by April 2017. Cash ban will reduce FY17 GDP by 0.75% -0.5%. Cash ban effect on economy to normalise by beginning of FY18
10.
The Survey suggested good fiscal performance by states should be incentivized to keep the overall fiscal performance on track
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11.
Economic Survey 2016-17 suggests setting up of a centralised Public Sector Asset Rehabilitation Agency (PARA)
PARA will look after the largest, most difficult Cases, and make Politically Tough Decisions to reduce Debt
12.
Gross NPAs has climbed to almost 12% of gross advances for public sector banks at end-September 2016
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13.
India’s NPA ratio is higher than any other major emerging market, with the exception of Russia
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