Economic survey 2015 ahead of Budget: Highlights

India's economy will grow at a rate of more than 8 percent in the 2015/16 fiscal year, a key economic report said on Friday, indicating scope for big bang reforms.

Economic growth at market prices is expected to be between 8.1 and 8.5 per cent, it said.

The survey prepared by the finance ministry's chief economic adviser Arvind Subramanian on the state of Asia's third-largest economy was released ahead of Saturday's federal budget announcement for 2015/16 fiscal year that begins on April 1.

Following are the highlights of the survey:

FISCAL DEFICIT

* India must meet its medium-term fiscal deficit target of 3 per cent of GDP

* Government will adhere to fiscal deficit target of 4.1 per cent of GDP in 2014/15

* Govt should ensure expenditure control to reduce fiscal deficit

GROWTH

* 2015/16 GDP growth seen at over 8 pct y/y * Double digit economic growth trajectory now a possibility * Econ growth at market prices seen between 8.1 - 8.5 per cent in 2015/16 on basis on new GDP calculation formula

CURRENT ACCOUNT DEFICIT

* Estimated to fall 1 pct of GDP in coming fiscal year

INFLATION

* Inflation shows declining trend in 2014/15 * Inflation likely to be below central bank target by 0.5 - 1 per centage point

* Lower inflation opens up space for more monetary policy easing

* Govt and central bank need to conclude monetary framework pact to consolidate gains in inflation control

* CPI inflation in 2015/16 is likely to range between 5 - 5.5 per cent

REFORMS

* There is scope for big bang reforms now * India can increase public investments and still hit its borrowing targets

FISCAL CONSOLIDATION

* Govt remains committed to fiscal consolidation * India can balance short-term imperative of boosting public investment to revitalize growth with fiscal discipline

* Outlook for external financing is correspondingly favourable

SUBSIDIES

* Overhauling of subsidy regime would pave the way for expenditure rationalisation

IT & ITES SECTOR

* IT and ITeS sector including Business Process Management (BPM), continues to be one of the largest employers in the country

* Software products and services revenues for 2015-16 is projected to grow at 12-14 per cent.

* Government’s “Make in India” mission has included IT and BPM among the 25 focus sectors.

TOURISM

* Increase in growth on both foreign tourist arrivals at 7.1 per cent and foreign exchange earnings at 6.6 per cent in the year 2014.

* Easing of the Indian tourism visa regime through the expansion of Tourist Visa on Arrival enabled by Electronic Travel Authorization (ETA) will give a fillip to foreign tourist arrivals in the country.



TRADE AND REPAIR SERVICES SECTOR

* Migration from traditional stores to modern retail continues, though the latter still accounts for only 8 per cent of the total market.

E-COMMERCE MARKET

* Government proposes to include sufficient provisions for consumer safeguards in the ongoing amendments to the Consumer Protection Act, 1986.

MEDIA AND ENTERTAINMENT INDUSTRY

*With 100 per cent FDI permitted in the Film Sector, India is emerging as the new favourite of international studios.