Economic Survey: Cautious optimism

The Economic Survey underscores(view/scrutinize-बल देना) the need to maintain fiscal(budgetary-वित्तीय) credibility(reliability-विश्वसनीयता.)

The Economic Survey for 2017-18 paints the picture of an economy that gives reason for both optimism(confidence/buoyancy-आशावाद) and caution(heed/attention-सावधान). It projects(predict/estimate-आकलन) that GDP growth could accelerate to 7-7.5% in 2018-19, from 6.75% in the current fiscal(budgetary-वित्तीय), reinstating(restore/bring back-पुनः स्थापित करना) India as the world’s fastest-growing major economy. According to Chief Economic Adviser Arvind Subramanian, the key factors contributing to the positive prognosis(forecast/predict-भविष्यवाणी) are the reform(improvement/amelioration-सुधार) measures: the July 1 implementation(execution/introduce-कार्यान्वयन) of the Goods and Services Tax and the steps taken to address the twin balance sheet problem in the banking sector. The latter includes the push to use the Insolvency(failure-दिवालियापन) and Bankruptcy Code for debt(loan-ऋण) resolution(pledge/solution-समाधान) and the initiative(step/action-पहल) to recapitalize public sector banks.

Adding to these domestic enablers(supporters/proponent-समर्थक) are the fair winds of a global recovery(retrieval/regaining-बहाली) that have already lent a lift to overseas demand for India’s goods and services. But capitalizing on these favourable(suited/suitable-अनुकूल) factors while remaining vigilant(cautious/attentive-जागरूक) to other macroeconomic threats(menace/peril-ख़तरा), including a key risk in the form of persistently(continuously-लगातार) high oil prices, would require exemplary(model-नमूने) economic stewardship(नौकरशाही). Among the concerns(anguish/anxiety-चिंता) the CEA has flagged is one relating to what the Survey calls “a classic emerging market ‘sudden stall’ induced by sharp corrections to elevated(raised-ऊपर उठाया) stock prices.” With Indian stock indices(सूचकांक) continuing to soar(increase/build up-बढ़ना) to new highs on an almost daily basis, the Survey warns against “sanguineness(non optimistic-गैर आशावादी) about its sustainability(stagnation/stability-स्थिरता)”. A correction in the stock market, besides triggering(spark/initiate-उत्तेजित करना) capital outflows, could force policymakers to raise interest rates, choking off the nascent(growing/building-बढ़ने वाला) recover.

On the fiscal front(lead/foremost-सामने), the survey contends(assert/claim-तर्क) that the Centre needs to reappraise(review-पुनर्मूल्यांकन) its priorities(primacy). The onus(liability/obligation-दायित्व), it argues, has to be squarely placed on establishing and maintaining policy credibility(trustworthy/reliability-विश्वसनीयता). To this end, it argues against “setting overly ambitious(enthusiastic/aspiring-महत्त्वाकांक्षी) targets for consolidation(gathering), especially in a pre-election year” that are based on optimistic(sanguine/hopeful-आशावादी) and unrealistic assumptions. Instead, it recommends a “modest consolidation” that would signal a return to the path of calibrated(test/verify-जांच करना) deficit(shortage-घाटा) reductions. In doing so, it appears that the Survey is signalling(indicating) that the government may have to retain(maintain/possession-बनाए रखने के) the elbow room to stabilise(fix) the GST, complete the recapitalisation exercise and, most crucially, support agriculture. 

Devoting an entire chapter to ‘Climate, Climate Change and Agriculture’, the CEA and his team have stressed(emphasize/underline-पर बल दिया) on the dangers climate change poses(position/stance) to the outlook for farm growth. With the potential to reduce annual agricultural incomes — by as much as 20-25% for unirrigated areas — the Survey calls for a range of mitigation(reduce/alleviate-कम करना) measures including extensive provision of efficient irrigation technologies and a wholesale review of the cereal(wheat)-centric approach to policy. Citing job creation and education as key priorities, the Survey sets out a plan for rapid economic expansion by recommending that policymakers keep their sights (view) trained on strengthening “the only two truly sustainable engines — private investment and exports.”