For the first time today, the government presented a second or a mid-year economic survey for the year 2017-18 highlighting the new factors that the economy faces since the last such exercise in February. India's service sector, which was highly resilient even during the global financial crisis, has moderated to 7.7 per cent in 2016-17, according to the Economic Survey. The sector, which grew by 9.7 per cent in the previous year, however remains the key driver of India's economic growth, contributing almost 62 per cent of its gross value added growth in 2016-17. Policies like GST and FDI liberalisation coupled with initiatives for promoting digitalisation, tourism and shipping have brightened the growth prospects for this sector, the mid-year survey which was tabled in Parliament on Friday said. "India's services sector growth, which was highly resilient even during the global financial crisis, has been showing moderation in recent times," it said. In conversation with NDTV's Vikram Chandra, Chief Economic Adviser Arvind Subramanian explains the road ahead for the Indian economy.
Here are the highlights:
• The medium term (outlook) looks good... but there are worries for the near term. There is a trend deceleration heading towards deflation, that isn't slowing down. That is a worry: Chief Economic Adviser Arvind Subramanian
• Non-Performing Assets (NPA) are a big growth challenge: Arvind Subramanian
• A series of factors weighing on the economy like bad loans, high debt levels of some corporates: Arvind Subramanian to NDTV
• Are farm loan waivers sustainable? Farm loan waivers could add to deflationary pressures on economy. Since you have a ceiling, states have to cut down on other expenditure to compensate for farm loan waivers which means cutting down on infrastructure funding: Chief Economic Adviser.
• Over the next few years, inflation is expected to be lower than what we had in the past: Arvind Subramanian to NDTV
• Inflation is low and this is because of good decisions taken by the government and the RBI. Some of the factors are temporary and the trend might reverse (for inflation) somewhat, but it will go up and settle at a reasonable level: Chief Economic Adviser
• Interest rates still high: Real interest rates are rising and the cost of lending is high. Over the next few years, inflation is expected to be lower than what we had in the past. We can expect 3% or 4% going forward. In the next few years, we can expect inflation to remain low. Both in terms of scope and need for the economy, there is potential for interest rates (lending rates) to go down significantly. My technical assessment is that interest rates can come down by a fair amount. I am not the authority, so won't get into the numbers of it, said Mr Subramanian.
• More people now in tax net: GST has eased the logistics of businesses and increased turnover time. The removal of tax posts and borders has helped to a great extent. We see 13.5 lakh new tax payers after GST. And over 5 lakh new tax payers due to demonetisation. So both have had their positive effects. They (taxpayers) are coming into the net and can now be monitored at all times and that is a big success.
• Note ban: Boost to digitalization: People now hold 20 per cent less cash than they did before demonetisation and that is a great trend. It shows signs of moving towards a less-cash economy. Digitisation is on the rise and that is good for the economy, Chief Economic Adviser told NDTV's Vikram Chandra.
• The big benefit of GST, i.e. invoice matching, will come in over the next few months. Under that old system, a consumer saw only the state VAT on their invoice, but in reality there was also an embedded central excise and other levies. Now they see a higher GST rate, but there is no embedded central excise and does away with all other levies too. So the higher number does not mean a higher tax. People need to be made aware of it.
• Growth Slowing, But Still Reasonable: We aid farmers in various way - loan waivers being one of them. We can do something for the farmers where they can sell directly, whether we can transfer money to them directly. We can help them find a better and easier marketplace for them to sell their produce.
................................ Advertisement ................................
A journalist from Gujarat, in judicial custody in a case of alleged GST evasion, was charged in a separate case last week for allegedly possessing confidential government documents, sparking outrage from some quarters, including the Editors Guild.
Introduction of the Goods and Services Tax (GST) in India was a "classical example of cooperative federalism," Chief Justice of India D Y Chandrachud said on Saturday.
Union Minister for Petroleum and Natural Gas Hardeep Singh Puri on Friday called to build consensus over bringing petrol, diesel under the Goods and Services Tax.
Maintaining financial discipline and regulatory compliance, domestic airline SpiceJet has cleared all its Goods and Services Tax (GST) dues.
Tamil Nadu BJP chief, K Annamalai, found himself in a spot of bother Friday after an "unintended breach of privacy" - the sharing of a private conversation between Union Finance Minister Nirmala Sitharaman and a leading businessman from the state.
दूसरी आज़ादी लाई GST - पहले परांठा, अब आटा, हीरे पर कम, स्याही पर ज़्यादा...Ravish Kumar
Tuesday July 19, 2022मोहम्मद ज़ुबैर का केस कानून की प्रक्रिया को लेकर एक गंभीर बहस का मुद्दा बन गया है. महंगाई से लेकर मुकदमे का एक ही हाल है.अब तो चीफ जस्टिस भी कह रहे हैं कि जल्दबाज़ी में गिरफ्तारी होने लगी है.
Opinion: GST, Historical Tax Reform, At 5 Years, Has Lost Its WayAndy Mukherjee | Bloomberg
Thursday July 07, 2022Five years ago, India's federal and state governments struck a historic deal. From July 1, 2017, a uniform tax on goods and services - marketed by Prime Minister Narendra Modi as "One Nation, One Tax, One Market" - replaced a bewildering array of loc
Opinion: In GST Row, Centre Throws Nationalism Argument At StatesPraveen Chakravarty
Monday August 31, 2020Rules by bureaucrats, legalese by lawyers and analysis by economists are cold, futile methods to resolve this crisis when the need of the distressed hour is a warm, empathetic hand of the political leadership.
Blogs: सरकार ने दी कॉरपोरेट टैक्स में राहत, क्या आम आदमी को होगा फायदा?Ravish Kumar
Saturday September 21, 2019अगले शुक्रवार का इंतज़ार कीजिए क्या पता आम लोगों का भी टैक्स से राहत मिल जाए, या क्या पता पुरानी पेंशन व्यवस्था ही बहाल हो जाए. वित्त मंत्री जिस तरह शुक्रवार को अपना नया बजट पेश कर रही हैं, राहतों का एलान कर रही हैं, उसमें कुछ भी उम्मीद की जा सकती है. आखिर कारपोरेट ने कब सोचा होगा कि सरकार उसे एक दिन 1 लाख 45 हज़ार का घाटा उठाकर करों में छूट देगी. इस फैसले को ऐतिहासिक और साहसिक बताया गया है.
................................ Advertisement ................................