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%
- 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.
- The El Nino effect is expected to fuel inflationary pressure going ahead.
Projections for Key Macro Economic Variables
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