‘Economic prospects look bright in near term’
New Delhi, Aug 12: Indian economy is showing "bright" near-term prospects, but reducing fiscal deficit to 3.5% of GDP in 2016-17 is a challenge because of additional liabilities on account of pay revision, the government said on Friday.
The Medium Term Expenditure Framework Statement, tabled by Finance Minister A ru nJ a it le yin the Rajya Sabha, said major subsidies are expected to decline gradually from 1.5% of GDP in 2016-17, to 1.4% in 2017-18 and further to 1.3% in 2018-19.
The statement said macro economic stability has improved with the continuance of fiscal prudence and lower inflation particularly due to moderation in crude prices.
"In light of the encouragingperformance of the economy during the previous financial year, marked by pick-up in economic growth, lower inflation, buoyant tax revenues, increasing foreign direct investment flows and the government's push to reforms in crucial areas including banking, infrastructure, power, taxation. The near term prospects for the economy look bright," it said. PTI