India Economic Survey 2017: Key takeaways; crude, demonetisation risks seen in FY18

Moneycontrol BureauThe Economic Survey 2017 expects GDP to grow at 6.75-7.5 percent in 2017-18, in a guarded forecast compared to estimated 7.1 percent in 2016-17Here are the main forecasts and observations# Economic Survey says GDP to grow at 6.75-7.5 percent in 2017-18, in a guarded forceast compared to estimated 7.1 percent in 2016-17# Demonetisation risks to grow in 2017-18.# Cautions against rising crude prices that could fan inflation.# Lower interest rate in 2017-18 will help economy.# Strongly advocates the roll-out of a universal basic income (UBI) scheme for the poor in India.# Advocates reforms to unleash economic dynamism.# Fiscal activism embraced by advanced economies not relevant for India.# Calls for review of FRBM framework for a new public debt management policy# Advocates the concept of Universal Basic Income (UBI) as an alternative to the various social welfare schemes in an effort to reduce poverty.# UBI, based on the principles of universality, unconditionality and agency, is a conceptually appealing idea but implementation hurdles remain# UBI is a powerful idea whose time even if not ripe for implementation, is ripe for serious discussion.# India needs an evolution in the underlying economic vision across the political spectrum and further reforms are not just a matter of overcoming vested interests that obstruct them. # Main challenges: ambivalence about property rights and the private sector, deficiencies in State capacity, especially in delivering essential services and inefficient redistribution.# Difficulties in privatizing public enterprises, even for firms where economists have made strong arguments that they belong in the private sector.# Need to further privatize the Civil Aviation, Banking and Fertilizer sectors.# Capacity of the State in delivering essential services such as health and education is weak due to low capacity, with high levels of corruption, clientelism, rules and red tape. # At the level of the states, competitive populism is more in evidence than competitive service delivery.# Constraints to policy making due to strict adherence to rules and abundant caution in bureaucratic decision-making favours status quo# Redistribution by the government is far from efficient in targeting the poor. # Over the past two years, the government has made considerable progress toward reducing subsidies, especially related to petroleum products. # There is still a journey ahead to achieve dynamism and social justice. Completing this journey will require broader societal shifts in the underlying vision# Suggests setting up of a centralised Public Sector Asset Rehabilition Agency (PARA)