Highlights
FICCI’s latest Economic Outlook Survey puts across the GDP growth estimate for the year 2014-15 at 5.3%, with a minimum and a maximum range of 4.9% and 5.8%. This is a tad lower than the 5.5% growth estimate put out by the economists in the previous survey round and mainly on account of bleak agriculture prospects due to sub-par monsoon forecasts.
Median Growth forecast (2014-15)
- Industry at 3.1%
- Agriculture sector at 2.1%
- Services sector at 7.0%
Fiscal Deficit
- The median forecast for fiscal deficit stands at 4.5%, with minimum and maximum range of 4.2% and 5.5%.
- Fiscal deficit to GDP ratio for 2014-15 to breach the target of 4.1% set in the interim budget.
Inflation
- The El Nino effect is expected to fuel inflationary pressure going ahead.
Projections for Key Macro Economic Variables
![IIP-growth-forecast](http://ficciblog.myassociates.org/1f9i2c7ci/wp-content/uploads/2014/07/IIP-growth-forecast.jpg)
![WPI-growth-forecast](http://ficciblog.myassociates.org/1f9i2c7ci/wp-content/uploads/2014/07/WPI-growth-forecast.jpg)
![CPI-growth-forecast](http://ficciblog.myassociates.org/1f9i2c7ci/wp-content/uploads/2014/07/CPI-growth-forecast.jpg)
![capital-formation-growth-forecast](http://ficciblog.myassociates.org/1f9i2c7ci/wp-content/uploads/2014/07/capital-formation-growth-forecast.jpg)
Looking forward to the forthcoming Union Budget
The focus of the budget should be on pushing growth and investments. Some of the other suggestions include-
- Clear roadmap for implementation of Goods and Services Tax (GST), which will give a huge boost to the economy. Review of the Direct Tax Code (DTC) with a view to widen the tax base and rationalizing exemptions. These big ticket reforms should be taken up as soon as possible.
- Signal that the government is looking at strict fiscal prudence. Chart out a path to contain subsidies and switch the focus from non plan to plan expenditure. Put across a roadmap for disinvestment.
- Positive indications for the manufacturing sector would be critical. It is imperative to firm up the growth in manufacturing sector, which will also aid employment generation enabling inclusive growth.
- Boost infrastructure spending. Fast track implementation of stuck projects.
- Indicate way forward on labor reforms
Read FICCI’s Economic Outlook Survey in detail here