Economic Survey 2016-17 LIVE: GDP growth rate placed at 7.1 % as per the Advance Estimates by the CSO

Short term challenge is reviving private investment (credit) and exports to boost employment creation, CEA says. 

Universal Basic Income a radical new idea; an idea whose time is right for deliberation, not necessarily for immediate implementation, CEA said. 

EconomicSurvey suggests setting up of a centralized Public Sector Asset Rehabilition Agency, CEA said. Economic Survey presents the idea of #UniversalBasicIncome, as a conversation with and within the Mahatma, he added. 

Pointing out the risk and challenges to outlook, CEA said:

1. Domestic front, any lingering uncertatinity from demonetisation
2. External front are higher oil prices, escalating trade tension and resurgence of protectionism
3. Upside potential: Revival of exports with spillover to investment. 

CEA said that the balance sheets of banks and corporates are still challenged.

He exhorted the media to refrain from "misinterpreting and mischievously interpreting" GDP projections.

Giving warning, CEA said that it is "not appropriate"  to do a before-after analysis of GDP growth, with resp. to demonetisation. The correct way is to analyse impact in current year with and without demonetisation. 

Demonetisation simultaneously reduced supply of cash, and increased supply of deposits. Thereby increasing price of cash, and reducing price of deposits, CEA said. He said that the impact of demonetisation of Currency squeeze was less severe than perceived.

Demonetisation a very analytically unique and unusual experiment, CEA said. It has affected different forms of money very differently.

Talking about the deminetisation, CEA says that public debate on demonetisation has raise 3 issues:

Design and implementation
Costs and Benefits 
Benefits of future economic policies

CEA talks about the major achievements in the past one year.

CEA says macroeconomic stability absolutely fundamental to anything the Government wants to do. We should never take this for granted. 

The past year has had robust macroeconomic stability, says CEA Arvind Subramanian. 

Economic Survey 2016-17 elaborates that as the fiscal challenges mount for the states because of the Pay Commission recommendations, and mounting payments from the UDAY bonds, there is a need to review how fiscal performance can be kept on track. 

Greater reliance will need to be placed on incentivizing good fiscal performance, not least because states are gradually repaying their obligations to the Centre, removing its ability to impose a hard budget constraint on them says the Economic Survey. Above all, however, incentivizing good performance by the States will require the Centre to be an exemplar of sound fiscal management itself.

 The deficit reduction owes much to favorable exogenous factors:

· An acceleration of nominal GDP growth (of 6 percentage points on average after 2005) helped boost States’ revenues by about 1 percent of GSDP;

·  Increased transfers from the centre of about 1 percent of GSDP both because of the 13th Finance Commission recommendations and the surge in central government revenues;

·  Reduced interest payments of about 0.9 percent of GSDP on account of the debt restructuring package offered by the Centre; and

·  Reduced need for spending by the States—estimated at about 1.2 percent of GDP--as the Centre took on a number of major social sector expenditures under the Centrally Sponsored Schemes (CSS).