Economic Survey 2016: Medium Term Growth between 7 to 7.75% : Economic Survey 2015-16 witnessed the growth between 7 to 7.75% according to the latest survey. Economic Survey 2015-16 sees the economy growing between 7 to 7.75%. It also says that there is need to review the economic framework.
Ahead of the Union Budget, the Economic Survey on Friday termed the situation as challenging but manage to make growth of 7 to 7.75% in next fiscal year which can increase to eight percent in couple of years.
The Economic Survey for 2015-16 which was presented in Parliament today, also made case for carrying forward the reform process to achieve macroeconomic stability.
After 7.2% economic growth in 2014-15, it is believed to be expansion in economy will be 7.6% in current fiscal year to become the fastest growing economy in the world. But it is confirmed that if the world economy remained weak it will affect Indian Economy too in long term. Despite of all the challenges, the fiscal deficit target of 3.9% of GDP seems achievable.
“One of the most critical short term challenges confronting the Indian economy is the twin balance sheet problem- the impaired financial positions of the public sector banks and some corporate houses. The twin balance sheet is the major impediment to private investment and a full-fledged economic recovery,” the Survey said.
The survey also said that the average borrowings by banks have increased significantly in the immediate after month of US fed rate hike, resulting in appreciation of the rupee. One trends witness in the capital markets, the Survey said that during the fiscal 2015-16 till December the mobilization of resources through public and right issues has urged rapidly as compared to the last financial year.
Due to the trends witnessed in the market, 71 companies raised Rs. 51,311 crore from the capital market compared to Rs. 11,581 crore during the corresponding period of 2014-15. Fund garnered by mutual funds also increased substantially to Rs. 1,61,696 crore from Rs. 87,942 crore.
However, two factors can boost consumption, increased spending from higher wages and allowances of government workers if the 7th Pay Commission is implemented and return of monsoon.
“The (Indian) market has rebounded time and time again, and it is hoped that as the global financial markets settle down, India can become the leading investment owing to its robust macroeconomic fundamentals,” as per the 2015-16 report card of the state of the economy tabled by Finance Minister Arun Jaitely in Parliament today.