Economic Survey 2017: Finance Minister Arun Jaitley today tabled the Modi government’s Economic Survey for 2016-2017. And while along expected lines the survey talks about economic growth, and macro level indicators and paints a picture for trends in growth, you would wonder why all the jargon should interest you as the common man. Here we decode some interesting aspects of India’s report card – Economic Survey – for you, also analysing what they could possibly mean for you:

1) Taxes: According to the Economic Survey, the indirect taxes grew at 26.9% during April-November 2016. And while the government spent a lot on the implementation of the 7th Pay Commission recommendations, the overall revenue was robust.

What it means for you: With better tax collection and possible surplus from demonetisation, the Finance Minister may have more room to give the common man tax benefits, tinker with tax rates, and at least not raise them!

 

 

2) Prices: The survey says that the CPI inflation remained under control for the third successive financial year. The average CPI inflation declined to 4.9% in 2015-16 from 5.9% in 2014-15 and stood at 4.8% during April-December 2015.

What it means for you: While some components of inflation are admittedly sticky, the overall trend in prices is benign, indicating that you can look forward to not only shelling out less from your pocket but also pay lower EMIs. This is because lower inflation would give room to the RBI to cut key rates, and would imply lower loan rates for you in the future.

3) Industry and Services growth: The bad news is that the growth rate of the industrial sector is estimated to moderate to 5.2% in 2016-17 from 7.4%in 2015-16. The good news is that the growth in net profit of corporate sector registered a remarkable growth of 16.0% in Q2 of 2016-17 as compared to 11.2% in Q1 of 2016-17.

Service sector is estimated to grow at 8.9% in 2016-17, almost the same as in 2015-16. It is the significant pick-up in public administration, defence and other services, boosted by the payouts of the Seventh Pay Commission that is estimated to push up the growth in services.

What it means for you: The data indicates a mixed-bag for the prospect of job seekers in the year ahead. The good news is that the government seems aware of the slowdown in various segments and therefore the Budget may focus on impetus to these sectors and hence job creation.

4) Universal Basic Income: The survey has advocated the concept of Universal Basic Income (UBI) as an alternative to the various social welfare schemes in an effort to reduce poverty. The survey believes that districts where the needs (for subsidies) are greatest are precisely the ones where state capacity is the weakest. The survey says that the more efficient way to help the poor would be to provide them resources directly, through a UBI.

What it means for you: For the poor in the country it would mean that while the concept of Universal Basic Income may take a lot of time to become a reality – certainly not in the Budget tomorrow – but there are indications that the government may look to plug in subsidy leakages and introduce UBI in the coming years.

You May Also Like To Watch This:
[jwplayer i0PPmNBT]

5) Property tax: The survey states that one promising source of revenues is property tax. The study done for the Survey shows that property tax potential is large and can be tapped to generate additional revenue at city level.

What it means for you: Going forward, as an honest payer of property tax, you can look forward to your honesty being rewarded in the form of better tax collection and hence investment in providing better infrastructure and facilities.