Eco Survey Lists Growth Pains, Prescribes Pep Pills
Makes strong case for monetary easing and fiscal adjustments, flags multiple new risks and deflationary impulses
New Delhi: The Economic Survey made a strong case for monetary easing and fiscal adjustments, flagging multiple new risks and deflationary impulses that could hinder the country achieving the higher end of the projected growth band of 6.75% to 7.5% for this fiscal year. A structural reform push to growth will come from implementation of the goods and services tax (GST), privatising national carrier Air India and steps to address the twin balance-sheet problem.
“The balance of probabilities has changed accordingly, with outcomes closer to the upper end having much less weight than previously,” said the second instalment of the Economic Survey for FY17. The first part had forecast FY18 growth at 6.75-7.5%. The second instalment sticks with that but cited multiple downside risks in near term amid fundamental optimism about the medium term.
Lead authored by chief economic adviser Arvind Subramanian, the survey revives the disagreement between him and the central bank over monetary policy. The survey piled pressure on the Reserve Bank of India to cut interest rates, saying the key policy rate is still 25-75 basis points more than neutral. It said there is considerable scope for monetary easing and the sooner it is done, the quicker the economy can reach its full potential.
The survey also suggested that the government should be more flexible and allow fiscal adjustments during the year if required.
The buyer was required to keep the certificate of purchase for inspection by an animal inspector. “Why are you always presuming that animals are cows or bulls? It could be chicken,” Chief Justice JS Khehar said. “Why can’t a man take it home and eat it?” At another point in the hearing he said: “Slaughter is not cruelty.”
The new rule on livestock trade, notified on May 23, also disallowed slaughter of animals in the name of religion, which was allowed under the Prevention of Cruelty Act. The government, through Additional Solicitor General PS Narasimha, told the bench comprising CJI Khehar and Justice DY Chandrachud, that the May 23 rule was already under review, and assured the court that it would not be given effect to in the interim.
“We are in the process of reviewing these rules in consultation with all stake-holders and it’s nobody’s case that it would not be placed before Parliament,” Narasimha said.
However, the bench disagreed and said since the rule was already notified, the court was staying it till such time a final verdict was passed.
“The rules have statutory force, you can’t say you won’t implement,” the CJI observed.
Narasimha argued that the rule was intended to prevent any cruelty to animals and issued under the concurrent list. He said animal markets were purely for trade; those for slaughter were to be picked up directly from farms by aggregators. Both would be governed by different regimes, he said. “The government is concerned by the huge illegal exports of meat.”