The Economic Survey 2019-20 was tabled by Finance Minister Nirmala Sitharaman in the parliament today (31 January). The survey projects the Indian Economy to grow at a rate of 6 to 6.5 per cent in the upcoming Financial Year 2020-21.
Inflation has declined sharply from 3.2 per cent in April 2019 to 2.6 per cent in December 2019, which as per the survey reflects a weakening demand pressure in the industry.
The survey projects the current fiscal growth to stand at 5 per cent and notes that the fiscal deficit target of 3.3 per cent for FY20 needs to be relaxed to spur growth.
The survey expects growth to strongly rebound in FY21 and added that the resurgence will begin from the second half of the current financial year.
The survey adds that a low tax to GDP ratio has constrained the government’s infrastructure spending and the banks may remain averse in this sector unless the IBC process speeds up.
Tax collections in the current financial year is expected to miss the target and non-taxation revenue is not sustainable year-on-year, notes the survey. The revenue collection will be impacted by how quickly GDP growth recovers.
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