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On having a close study of the Economic Survey 2015-16, ICAI appreciates the Government for showing drastic improvement in the major indicators of reforms in India. The Survey suggests that the country is moving towards a growth rate in range of 7 to 7.75 per cent in 2016-17. Today's Economic Survey validates expectation that fiscal goal posts will be adhered to and consolidation remains on track. And amidst gloomy international landscape India remains a heaven of stability.

The Government is committed to fiscal consolidation and enhancing revenue generation will be the priority. Reforms needed for long-term growth prospects on 3 fronts – low and stable inflation regime, tax and expenditure reform and regulatory framework. Inclusive growth in India requires bridging gaps in educational outcome and improve heath attainment across the population. Improving the compliances through better tax administration, tapping new resources etc. would help to raise more revenue and keep the fiscal deficit at levels projected in the revised fiscal roadmap.

Inflation showing declining trend as a result of Government measures and falling international oil prices. The survey expect RBI to meet 5% inflation target by March 2017, prospect of lower oil prices over medium term likely to dampen inflationary expectation. 2015-16 fiscal deficit seen at 3.9% of GDP seems achievable. Credibility and optimality argues for adhering to 3.5% of GDP fiscal deficit target.

The current account deficit seems around 1 to 1.5% of GDP for the year 2016-17. Tax revenue expected to be higher than budgeted level in 2015-16. India’s export which was in negative zone since December 2014 are expected to start picking up in the next fiscal year.India’s external sector outcome continues to be strong and sustainable because of strong macro-economic fundamentals and low commodity prices.

Import dipped by 15.46% to USD 324.52 billion for the 10 month brochure of this fiscal living at deficit of USD 106.8 billion. The Economic Survey has proposed direct transfer of subsidy to farmer and said that with a aim of benefitting the small farmers a reform package in the fertilizer subsidy would address the problem of leakages and skewed mix of fertilizer use.

Indian industry should be released with the burden of subsidizing electricity supply for agriculture and domestic consumers and allow to procure power from open market. The survey recalls the promise to bring down corporate taxes from 30% to 25% while proposing the phasing out of exemptions in an orderly manner. It also calls for reasonable taxation for the better off individuals regardless of whether their income comes from industry, services, real estate, and agriculture.

The performance of indirect taxes in the first 9 months indicates that the budget estimates are likely to be achieved and possibly exceeded partly on account of measures taken by the Government to enhance revenue by raising duty on petroleum products. To boost the economy the center has to ensure that labour regulation is worker centric by expanding workers choice and reducing mandatory taxes on formal sector employment.

Foreign direct investment has been liberalized across the board and vigorous efforts have been undertaken to ease the cost of doing business. Bank account for over 200 million people under Pradhan Mantri Jan Dhan Yojana have been created.

The Survey has expressed concern over approval of Goods and Service Tax Bill being elusive so far, the disinvestment programme failing short of targets and the next stage of subsidy rationalization being a work in progress.

Advancing the game-changing JAM (Jan Dhan Aadhaar Mobile) agenda. LPG witnessed the world’s largest direct benefit transfer program, with about 151 million beneficiaries receiving a total of Rs. 29,000 crore in their bank accounts. The infrastructure is being created for extending the JAM agenda to other government programs and subsidies.

Improving service delivery in the wake of the 14thFinance Commission requires an evolution in the relative roles of the Centre and the states: the Center should focus on improving policies, strengthening regulatory institutions, and facilitating cooperative and competitive federalism while the states mobilize around implementing programs and schemes to ensure better service delivery.

India’s long-run potential GDP growth is substantial, about 8 to 10%. But its actual growth in the short run will also depend upon global growth and demand. After all, India’s exports of manufactured goods and services now constitute about 18% of GDP, up from about 11% a decade ago.

The survey highlighted that the private sector will remain the engine of long term growth. The connectivity through railways will also play an important role to revive growth and to deepen physical connectivity.

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