The Economic Survey has recommended that the Budget should be pragmatic and not aim for extreme fiscal targets. It has also signaled that there are pressures that have to be addressed such as oil prices in a pre-election year.
Among the obstacles to growth, the Economic Survey finds raising investment more significant than raising saving. It also points out that direct tax collections by states are significantly lower than those by counterparts in other federal countries.
Another key concern, according to the Economic Survey, is the constant surge in the oil prices. In this regard it says, in the first three quarters of 2017-18, oil prices were 16 per cent greater in dollar terms than in the previous year. Thus, it calls for “policy vigilance” in the coming year if high oil prices persist or stock prices correct sharply.
The Survey highlights agriculture, education, and employment as the focus areas in the medium term. On agriculture, it says that raising farm productivity while strengthening agricultural resilience is a priority area. It pegs agriculture growth in FY18 at 2.1%, while the industry growth for FY18 at 4.4%.
On the employment front, the Survey says that finding good jobs for the young and the increasing workforce, especially for women is a huge challenge. On education it says the priority has to be to create an educated and healthy labor force.
According to the Survey, policy recipes for the coming year will include a huge support to the agriculture sector – stabilising GST, privatising Air-India and creating an ecosystem for the new insolvency and bankruptcy process to resolve the bad loan problem in the banking sector.