Economic Survey 2020: Key takeaways

A day before Budget 2020, the government released the Economic Survey 2020 document in the Parliament on January 31. The survey said there could be challenges on the fiscal front in the financial year 2020-21.

"We may need to relax fiscal deficit target for FY20 to revive growth and need counter-cyclical fiscal steps to boost demand," the government said in the survey.

According to the survey, the greater home sales can clean up bank and NBFC balance sheets. "Realty companies must cut home prices to clear unsold inventory and private investments may get crowded on higher government infra spends," it said.

The government expects economy to grow in the range of 6-6.5 percent in FY21 and 5 percent in FY20.

Here are other key takeaways from Economic Survey, the government says:

Banks may remain risk averse unless Insolvency and Bankruptcy Code (IBC) process speeds up

Low tax/GDP ratio constrained government infrastructure spends

Improvement in tax mop-up hinged on GST revenue buoyancy

Growth resurgence is expected to begin starting second half of FY20

Length of Indian business cycle appeared to be 13 quarters

See strong rebound in growth in FY21 on low base

Cut in capex by government may adversely hurt growth

See FY20 tax collections to be lower against estimates

High non-tax revenue growth is not sustainable year after year

GST buoyancy is key to Centre, State revenue position

Pace of GDP growth recovery will impact revenue collection

See room to further rationalise subsidies, especially food

Seeing progress, albeit slow, in implementation of IBC

Improving composition, the quality of government spending is crucial

Continued global trade tensions could hit India exports

Industrial activity has been rebounding, showing signs of pick up

Rise in core inflation in December suggests demand pressure is building

Rationalisation of subsidies could be important to expand fiscal headroom

US-Iran tensions may weaken FDI inflows, depreciate rupee

Global sentiment continues to be in favour of India

See case for aggressive disinvestment of central PSUs

Concerns of misestimated Indian GDP unsubstantiated by data, thus unfounded

Fiscal deficit of states within targets set out by FRBM Act

Suggest Employee Stock Ownership Plan for state-run bank employees

Government intervention to boost wealth can undermine markets