Economic Survey 2016
Economic Survey, an annual document of the Department of
Economic Affairs, Ministry of Finance is the best material to study the current
status of Indian Economy. Data and its analysis from the Economic Survey of each
chapters are essential to read for all.
This year’s Economic Survey comes at a time of unusual
volatility in the international economic environment. Markets have begun to
swing on fears that the global recovery may be faltering, while risks of extreme
events are
rising. Amidst this gloomy landscape, India stands out as a haven of stability
and an outpost of opportunity. Its macro-economy is stable, founded on the
government’s commitment to fiscal consolidation and low inflation. Its economic
growth is amongst the highest in the world, helped by a reorientation of
government spending toward needed public infrastructure. These achievements are
remarkable not least because they have been accomplished in the face of global
headwinds and a second successive season of poor rainfall.
The task now is to sustain them in an even more difficult
global environment. This will require careful economic management. As regards
monetary and liquidity policy, the benign outlook for inflation, widening output
gaps, the uncertainty about the growth outlook and the over-indebtedness of the
corporate sector all imply that there is room for easing. Fiscal consolidation
continues to be vital, and will need to maintain credibility and reduce debt, in
an uncertain global environment, while sustaining growth. On the government’s “reformto-transform”
agenda, a series of measures, each incremental but collectively meaningful have
been enacted. There have also been some disappointments— especially the Goods
and Services Tax—which need to be retrieved going forward. Accelerated
structural reforms at the Centre, the dynamism of competitive federalism, and
good economics being good politics could all combine to maintain the fundamental
promise that is India. For now, but not indefinitely, the sweet spot created by
a strong political mandate but, recalibrated to take account of a weaker
external environment, is still beckoningly there.
