Analysts sceptical about achievability of Economic Survey targets

MUMBAI: Analysts have welcomed the Economic Survey as it points to the strengthening of the macroeconomic fundamentals, even as some expressed scepticisms on achieving the growth targets spelt out in the annual document.

Economists at the domestic rating agency Care Ratings said the findings indicate "an improvement in the macroeconomic fundamentals of the nation, which is reflected both in temporal and cross-country comparisons."

The survey reflects a much larger fiscal headroom becoming available to the government on account of expected pick-up in growth, lower oil prices and better targeting of subsidies, PwC India partner for public finances Ranen Banerjee said.

However, rival consultancy firm EY India's chief policy advisor D K Srivastava sounded skeptically on the growth front saying lower tax collections will hamper the public investment assumptions.

"The survey's growth optimism is less convincing. It would require in an increase in the investment rate of 4-5 percentage points of GDP," he said.

The tone of the survey document is "cautious" and this is a signal that "a dramatic budget with big bang reforms is not envisaged," another consultancy Grant Thornton said.

KPMG India's Jaijit Bhattacharya termed the 8 per cent growth target next fiscal as "audacious" but achievable because of the new way of computing GDP numbers.

He said the move to borrow only to invest in capital expenditure is very good as it will inculcate the fiscal discipline.

On the survey's comment to push the forex reserves till up to $1 trillion, he said it would be better to quantify it in terms of months of forex exposure that the country would have, including imports and repayments.