Budget could outline a different approach to agriculture with focus on raising farmer incomes, raising outputs, said Rajiv Kumar, Vice Chairman, NITI Aayog.
The Economic Survey that was tabled in the parliament today pegged FY18 GDP growth at 6.75 percent.
"A series of major reforms undertaken over the past year will allow real GDP growth to reach 6.75 percent this fiscal and will rise to 7 to 7.5 percent in 2018-19, thereby re-instating India as the world’s fastest growing major economy,” said the Economic Survey 2017-18.
The survey also said, a pause in general government fiscal consolidation may not be ruled out in FY18.
Rajiv Kumar, Vice Chairman, NITI Aayog said the Economic Survey is right in saying that given the structural reforms that have taken place in FY18, especially GST and therefore uncertainty in revenue collections but also the after effects of demonetisation, the formalization of the economy, all of that, so the fiscal deficit targets could be paused.
So, there could be a slippage but it will not be much because the government has done a lot in terms of disinvestment, and non-tax revenues, he added.
When asked what would be the goal post for FY19, he said the glide path on fiscal deficit could change and one might see slightly higher fiscal deficit targets for FY19 as well but on the other hand with the indirect tax net increasing by about 40 percent, and GST revenues expected to be very robust, the Finance Minister could stick to the 3 percent fiscal deficit target for FY19.
According to him, going forward the GST collection, direct tax revenues will be buoyant.
Talking about rising oil prices, he said we will have to bear the pain of that but going forward there could be some correction. Moreover, government's attempt to reduce our dependence on oil imports by focusing on renewable energy and domestic energy supply must be taken on board.
With regards to market, he said although one cannot rule out some correction in stock prices but nonetheless the continued upward movement of stocks, inflow of both portfolio and foreign capital will continue and will not be stalled. Moreover, slight hike in interest rates in US and Europe will not impact inflows into India because of our own buoyancy in growth and better market conditions.
With regards to Budget, he said it could outline a different approach to agriculture with focus on raising farmer incomes, raising outputs. It may talk about holistic treatment of agriculture sector, to shift farmers from being producers of commodities to being producers of agro-products and shift to high value crops than just staying with cereals. Credit to farmers may also come up in the Budget, said Kumar.According to him, the Budget will also emphasise a greater reform of health and education sector and these reforms will be accompanied with higher allocations to improve health and education standards of the country.
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