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  1. Budget 2018: Top five advice from CEA Arvind Subramanian to Arun Jaitley

Budget 2018: Top five advice from CEA Arvind Subramanian to Arun Jaitley

Budget 2018: The countdown to the last full Budget of the present Narendra Modi government has begun and the country is waiting to know what Finance Minister Arun Jaitley has to offer in the Union Budget 2018. Here is what CEA Arvind Subramanian has to say.

By: | Published: January 30, 2018 6:33 PM
Top five advice from CEA Arvind Subramanian to Arun Jaitley ahead of Budget 2018 Budget 2018: Top five advice from CEA Arvind Subramanian to Arun Jaitley (Image: ANI)

Budget 2018: The countdown to the last full Budget of the present Narendra Modi government has begun and the country is waiting to know what Finance Minister Arun Jaitley has to offer in the Union Budget 2018. He will present the Budget on February 1. Ahead of the Budget 2018, Chief Economic Advisor Arvind Subramanian spoke TV channels and explained that state of the economy, what was to be done under the current circumstances.

Under Arvind Subramanian’s supervision, the Finance Ministry on Monday also released Economic Survey 2018, which detailed developments in the Indian economy over the previous 12 months, summarised the performance on major development programmes, and highlighted the policy initiatives of the government and the prospects ahead of the India Budget 2018.

Here are top five advice from Arvind Subramanian ahead of the Budget 2018:

1. He said that higher oil prices may hamper the economic growth in the future and the government must target an ambitious fiscal consolidation for next year.

2. He also said that being vigilant about the rising oil prices does not mean an excise duty cut. He also said that the government will not go back on retail price deregulation.

Also Read: Budget 2018: Populism alone can’t win 2019 for BJP, outdoing Congress needs tough talk on reforms agenda

3.  Arvind Subramanian strongly advised against pre-election populism. He said pre-election fiscal populism should not be embraced and the government must look at ambitious fiscal consolidation targets in the Union Budget 2018.

4. On rural distress, he said that it is a long-term problem and the climate change will disproportionately impact unirrigated lands. He suggested the government to come up with smart irrigation techniques. He said that there is a need to address agrarian challenge with co-operative federalism.

Also Read: Budget 2018 income tax slabs: Will FM Arun Jaitley tweak rates, bring relief for tax payers?

5. On GST, he said that while the 28% GST bracket has shrunk significantly, there is more scope to improve rate structure from the existing ones.

Watch Video: Budget 2018: Why There’s A Good Case For Bringing Petrol Under GST

The Economic Survey report 2017-18 has estimated the economic growth rate in the fiscal year 2019 between 7% and 7.5%, while saying that the rising crude oil price has become a major concern and is expected to grow by average 12% in the FY19. The Budget 2018 comes against the backdrop of fiscal concerns from the 3.2% target of the Budgetary allocation, along with rallying crude oil prices on the global front.

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  1. Bipin Kochar
    Jan 31, 2018 at 9:22 am
    Stock prices are not based on current performance but on future potential - the economic survey projects a 7.5 growth - which should translate into a 24-28 growth in earnings - with the un-factored potential of further upside if the FM follows global direction and reduces direct taxes and encourages private sector investments. With a working age population growing at over 4 , India's inherent growth potential is 8-9 , this could even cross 10 if the RBI allows rupee to depreciate to Rs 68. Hence while the Indian stock market has not performed well during the past 3 years vis-a-vis global markets and it's inherent potential due to one time transition to GST and towards a more formal tax compliant economy (RERA and demonetization), market capitalisation shouls grow over 20 per annum driven by explosive growth by small caps many of which are at low PEs due to the transition impact. Arvind Subramanian should instead focus on creating the right climate for the formal sector growth.
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