Analysts say economic survey underlines headwinds to growth

MUMBAI: Analysts opined that the Economic Survey has clearly captured the headwinds facing the economy as it lowers growth forecast and calls for a bold Budget.

"The projected GDP growth of 6.75-7.5 per cent for next financial year in the survey clearly flags the risks that the economy is exposed due to emerging global protectionism and rising oil prices," Ranen Banerjee, public finance and economics leader at PwC India said.

He also said the higher farm growth of 4.1 per cent camouflages the negative impact of deceleration in the industrial GDP of 2.2 percentage points in the overall GDP growth percentage.


Richard Rekhy, chief executive of KPMG India said, "The survey points to a likely bold and reformative Budget that will have a strong focus on infrastructure, employment generation and easing business conditions. The issue of NPAs is most likely to be addressed coherently, along with taking stock of the PPP logjams."

He also said the survey signals that the economy is on a stable growth path. The range comes due to global uncertainties, including protectionist tendencies.

Rekhy also noted that the survey recognises the shortcomings of the economy and calls for required action from the Budget.

Jaijit Bhattacharya of KPMG said, the survey confirms the ballooning of bad debts and calls for setting up a bad bank to take away the toxic debts banks in the form of 'Public Sector Asset Rehabilitation Agency' or PARA.

The survey also brings back the age-old demand of a stable tax regime and widening of the tax base, including bringing real estate under GST, he noted.

On the note ban impact, he said the survey has given a better picture of the impact of the move, calling for some measures in the Budget to address the issues created by it.

Sachin Sandhir of RICS said the survey indicates a reforms-oriented budget, including privatisation of public enterprises.