According to the Economic Survey 2015-16, there will be a little impact on inflation due to the recommendations in the 7th Pay Commission and said it will not destablise prices.
Finance Minister Arun Jaitley tabled the Economic Survey 2015-16 in Parliament on Friday, which projected GDP growth of India in the range of 7 to 7.75 per cent in the the next financial year ended 2017. The survey projected a growth of 7.6 per cent in 2015-16 and also said that the growth rate of 8% or higher possible in next 2 years, given macroeconomic stability. The survey also added the fiscal deficit target of 3.9 per cent for 2015-16 seems achievable.
According to the Economic Survey 2015-16, there will be a little impact on inflation due to the recommendations in the 7th Pay Commission and said it will not destablise prices. The Reserve Bank of India will meet 5 per cent inflation target by the end of March 2017, the survey said.
There was also proposal to widens tax net 5.5 per cent of earning individuals to over 20 per cent.
The Economic Survey 2015-16 also states that despite volatility in global financial markets, the domestic equity market has been relatively resilient during 2015-16 compared to the other major emerging market economies. Benchmark indices BSE Sensex and NSE Nifty slid over 20 per cent in the past one year due to several factors such as rupee depreciation, weak global markets, selling pressure by foreign institutional investors and China yuan devaluation.
The net investment by foreign institutional investors/FPIs in the Indian market stood at Rs 63,663 crore in 2015 as compared to Rs 2,56,213 crore in 2014.
During 2015-16, year on year growth in gross bank credit outstanding has remained around 10 per cent. The sluggish growth can be attributed to incomplete transmission of the monitory policy, unwillingness of banks to lend credit on account of rising non-performing assets (NPA), and more attractive interest rates for borrowers in the bond markets.
The year on year growth in time deposits fell to 10.6 per cent in December 2016. This is because household saving are channelised to other areas like gold and real estate. The slowdown in time deposits has been slowing the growth of bank credit as time deposits remain the most important and cheaper source of banks funding.
Schemes such as Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jivan Jyoti Bima Yojana (PMJJBY), and the Atal Pension Yojana(APY), – were launched in 2015 in the insurance and pension sectors for creating a universal social security system for all Indians, especially for the poor and the underpreviledged.
As a result, the number of new basic saving bank deposit accounts rose considerably during the year. The number of such account increased to 44.1 crore for the period ending September 2015 and total number of banking outlets went up to 5.67 lakhs.
Durning April-December 2015, a total of 112.82 lakh members have enrolled under the National Pension Scheme.
India can become the leading investment destination owing to its robust macroeconomic fundamentals, the Economic Survey 2015-16 has said. The survey has pointed out that Indian markets have “rebounded time and time again”, and it is hoped that as the global financial market settle down, Indian market will attract foreign investments in a big way.