GDP growth of 6.75-7.5% faces downside risks: Economic Survey-II

Arun Jaitley has to present 2nd volume of 2016-17 Economic survey

"More research is needed to disentangle all the rich and complex interactions between demonetisation and its impact on the informal sector", the survey said.

It highlighted decline in farm revenues and non-cereal food prices, farm loan waivers, fiscal consolidation and declining profitability in the power and telecommunication sectors as the factors generating deflationary tendencies.

Drafted by Chief Economic Advisor Arvind Subramanian, the survey reflected strong growth in tax revenue, sustenance of the pace of capital spending and a consolidation of non-salary or pension revenue expenditure.

"Economy is yet to gather its full momentum and still away from its potential", Survey said. It said, "This growth suggested that the economy was relatively resilient to the large liquidity shock of demonetisation which reduced cash in circulation by 22.6% in the second half of 2016-17".

He said structural decline in inflation and inflation outlook create scope for lower interest rates. We seem to have achieved a 20 per cent reduction in the equilibrium cash holding which means that the cash-GDP ratio has come down by about 1.6 percentage points and this was one of the objectives of DeMo.

Snap shares dive 17% as user growth slows
Harel Insurance Investments & Financial Services Ltd. increased its stake in shares of Snap by 654.0% in the second quarter. For the sake of SNAP stock investors, taking the money from Alphabet - if it's still on the table - is the best option now.

The November demonetization took a toll on the Indian economy with the Gross Domestic Product (GDP) during the fourth quarter, ending March this year, falling sharply to 6.1 percent from seven per cent in the previous quarter while growth for entire 2016-17 also declined correspondingly.

"Cyclical conditions suggest that the policy rate should actually be below. the neutral rate. The conclusion is inescapable that the scope for monetary easing is considerable", it said.

In the USA, the sector growth growth decelerated to 1.9 per cent in 2016 from 2.8 per cent in 2015 mainly due to slowdown in sectors like real estate, professional and business services.

The first part of the survey, which was unveiled a day before the February budget, had estimated the economy to grow in the 6.75-7.5% range in 2017-18."There has been an across-the-board deceleration", said Subramanian.

The survey called for a further drop in interest rates - now at 6 percent after a 25 basis points cut last week.

North Korea frees imprisoned Canadian pastor
The American, 23, was released from Pyongyang prison and sent to the U.S. with "food poisoning" but soon died. His supporters have said he was on a humanitarian mission to North Korea when he was detained.

There has been a 20 per cent decline in cumulative cash holding by companies and individuals post demonetisation while the number of taxpayers has increased 45 per cent since then, the Economic Survey has said, pointing to positives from the withdrawal of high-denomination banknotes in November a year ago.

"Our reading of the Economic Survey confirms that there is a need to substantially cut down the policy rates by the RBI and ensure its full transmission by the banks in the form of lower lending rates for consumption and investment activities".

The Survey has noted that various factors such as launch of the GST, positive impacts of demonetisation, in-principle decision to privatise Air India along with further rationalisation of energy subsidies and actions to address the Twin Balance Sheet (TBS) challenge contribute to optimism in the economy.

Industry bodies CII, FICCI and Assocham also hailed steps taken by the government to resolve the "twin balance sheet" problem.

"India's services sector growth, which was highly resilient even during the global financial crisis, has been showing moderation in recent times", it said.

Champions League: Real Madrid dominates UEFA's shortlist for best footballers
Rumours stated it was Bale who was deemed expendable but maybe Ronaldo is more likely to make the switch to Manchester United. I never look at it in terms of taking on my former club, not at all. "It's something I've been through many times".

Related News:



Most liked

TN CM Edappadi Palanisamy sacks TTV Dinakaran from AIADMK
It was during his absence that EPS reportedly strengthened his position in the party and emerged as a real threat to Dinakaran. Parrying questions on whether the BJP was engineering the merger, he said the "give and take" has to happen for survival.

Mom to be charged with attempted murder after AMBER Alert
Her defender said that she did not think the child would die because she cracked open one of the car's windows. Troopers said they found Rickheit and her daughter either sleeping or unconscious in the auto .

McIlroy among favourites for PGA Championships success
The thought of a Palmer-Nicklaus rivalry revival excites not only fans but the players themselves, for it is the stuff of legends. He's always going to be one of my favoured picks whenever a major comes around and that's so often for sentimental reasons.

Pakistan's Sharif sets off on 'homecoming' procession
The media quoted Sharif as saying that while the people's mandate catapulted him to power, he was ousted "in a minute". Qamar Zaman Kaira of Pakistan Peoples Party (PPP) said that there could be around 10,000 people with Sharif.

Mylan NV Sees Unusually High Options Volume (MYL)
Zacks Investment Research raised Mylan N.V. from a "sell" rating to a "hold" rating in a research report on Thursday, May 25th. On average, equities research analysts predict that Mylan N.V. will post $4.86 earnings per share for the current year.

Minnesota governor calls mosque bombing 'act of terrorism'
The blast killed no one as worshippers prepared for their morning prayers but it caused damage to the imam's office. In the past, the White House has said the president is simply not able to address every incident.

Did 'Bachelorette' Rachel make the right choice? This recap makes good points
Rachel and Peter said goodbye after a tense discussion about whether or not he would ever get down on one knee. Somehow, Bryan gleans "a different energy" from her during the day and decides to chat about it over dinner.

Overwatch Summer Games 2017 is Now On With More Lucioball
We'll get the rest of the information on the Summer Games 2017 up for you in a jiffy. Six new skins are available to unlock for 3000 credits for this year's celebration.

Amy Schumer to make Broadway debut - all the details!
Steve Martin has a new Broadway play in the works called Meteor Shower , and he's assembled a solid cast of comedic actors. Meteor Shower is set to begin previews on November 1 at the Booth Theatre and will have its opening night on November 29.

Usher herpes accuser Quantasia Sharpton: 'My rights were violated'
She claims that the pair "engaged in sexual contact" after she celebrated her 19th birthday at an Usher concert. Sharpton is now 21 and went on to say that had she known he had herpes , she would not have consented to sex.

Two month ban for Sara Errani
The Italian's results, points, and prize money from the period following her test until June 7th have been disqualified. In a statement released on her official Twitter account, Errani strenuously denied knowingly taking a banned substance.

34 injured in the explosion of a truck bomb in Lahore
Another blast, targeting a census team in April, had resulted in the deaths of six people, including five forces personnel. Last month a suicide bomber from the Pakistani Taliban killed at least 25 people inLahore, many of them police.

Celebrity Big Brother 2017: 'Fake' Sarah Harding brands Paul Danan 'psycho'
It was a hard day in the Big Brother house for Harding who broke down in tears after discovering she was up for nominations. She later tells Sandi Bogle: 'We're living in a bubble. "I just don't feel I belong here anymore".

Trump & Mueller Headed for "Constitutional Confrontation" — Senator Blumenthal
In recent days, Trump aides have touted a greater discipline brought to the White House by retired Marine Corps Gen. He later said he misspoke and meant to say that he was in the Marine Reserve during the Vietnam conflict.

Klopp satisfied with Liverpool defensive options
The Mirror wasted no time in bigging up Chelsea's chances with intentions of £60m bids floated into the Internet wasteland. We can not force the things and we would never get a centre-back just because [of the sake of it].