India Budget Fiscal Deficit GDP
India Budget Fiscal Deficit GDPReuters File

The Indian economy is expected to grow in the range of 7 to 7.75 percent in financial year 2016-17, according to the Economic Survey tabled in Parliament Friday.

"...the Indian economy stands out as a haven of macroeconomic stability, resilience and optimism and can be expected to register GDP growth that could be in the range of 7.0 per cent to 7.75 per cent in the coming year," according to the Survey.

The projection is in line with the mid-year economic review released in December last year when the Modi government had estimated the GDP growth rate for the current fiscal at 7-7.50 percent, down from the budget estimate of 8.1 to 8.5 percent.

The Survey comes in the backdrop of a Rs 1.10 lakh crore additional burden the government has to shoulder in FY2017 on account of implementation of the One Rank One Pension (OROP) scheme and the 7th Central Pay Commission. 

The Survey was tabled by Finance Minister Arun Jaitley who will be presenting the Union Budget for FY2017 Monday.

The Survey underscores the role of the services sector, which is expected to contribute about 69 percent of the total economy during the current fiscal. The Survey touches upon a number of economic and non-economic data as well, besides giving insights on the expected state of growth for India for the next year.

Highlights of the Economic Survey 2015-16:

GDP growth could be in the range of 7.0 percent to 7.75 percent in the coming year.

Fiscal deficit target of 3.9 percent for the year 2015-16 seems achievable.

Indian economy will continue to grow more than 7 percent for the third year in succession in 2016-17 helped by a normal monsoon, despite global meltdown.

Asset quality of banks under stress...gross NPAs of banks as a proportion of gross advances increased to 5.1 percent in September 2015 from 4.6 percent in March 2015. Mining, iron and steel, textiles, infrastructure and aviation sectors contributed 53 percent of the total stressed advances.

Production of foodgrains and oil-seeds is estimated to decline by 0.5 per cent and 4.1 per cent respectively, while the production of fruits and vegetables is likely to increase marginally.

The total subsidy bill as a proportion of GDP is expected to be below 2 percent of GDP as per budget estimates for 2015-16. The 1.7 percent decline in major subsidies was due to a near 44.7 percent decline in petroleum subsidy during April-December 2015.

External debt in safe limits as shown by the external debt to GDP ratio of 23.7 percent and debt service ratio of 7.5 percent in 2014-15. Outstanding external debt which is 1.5 percent of GDP.

Trade deficit declines to $106.8 billion in April-January 2015-16 from $119.6 billion in corresponding period last fiscal.

Foreign exchange reserves at $351.5 billion as on Feb. 5, 2016. The reserves cover for imports increased from 8.9 months at end-March 2015 to 9.8 months at end-September 2015.

Current Account Deficit (CAD) is likely to be in the low range of 1 to 1.5 percent of GDP. 

During 2015-16, YoY growth in gross bank credit outstanding has remained around 10 percent, due to incomplete transmission of the monitory policy, unwillingness of banks to lend credit on account of rising NPAs, and more attractive interest rates for borrowers in the bond markets.

The year on year growth in time deposits fell to 10.6 percent in December 2016 due to household savings channelised to other areas like gold and real estate.