The Economic Survey 2018 has estimated that the Indian economy will grow by 7-7.5% in 2018-19.
The survey which was tabled in Parliament by Finance Minister Arun Jaitley, the Survey has predicted that the second half of Financial Year 2018 can clock 6.75% growth. The Economic Survey gave a positive picture for India’s short and medium term growth, while pointing out some downfalls. Growth in the current fiscal would be quarter of a percentage point larger than other estimate of 6.5%, owing to a pick-up in exports.
Besides, better-than-expected growth in GST revenues, India is headed for some fiscal slippage this year: the deficit could miss the target of 3.2% of GDP. This should have induced consolidation next year, but, come on, we are heading towards elections. The Survey makes a rich haul of data and analysis from GST on subjects ranging from which states export how much to correspondence between state domestic product and GST base. Despite showing the versatile use to which GST data can be put, the Survey warns against taking the fruit of such data analysis for granted: hidden sources of direct tax income that would boost tax revenue next fiscal, thanks to the audit trails generated by GST. So, the government should budget for revenue growth based on higher GDP growth, of up to 7.5% next fiscal, but not count on an early disruption of a long-stagnant tax/GDP ratio.