The Survey pegged the GDP growth for the current fiscal at 6.75% and said that exports as well as private investments are set to rebound in the coming year
The growth in the economy is picking up robustly as temporary impact of demonetization and GST (Goods and Services Tax) has been decimated, chief economic advisor Arvind Subramanian said.
The economy "seems to be picking up quite nicely and robustly", he said after the release of the Economic Survey on Monday.
The Survey pegged the GDP growth for the current fiscal at 6.75% and said that exports as well as private investments are set to rebound in the coming year. GDP is expected to grow 7-7.5% in next fiscal.
He said the growth rate projected by the Economic Survey is marginally higher than Central Statistical Organisation's estimate, as the CEA has taken into account the recent developments too.
GST is one of the biggest achievements. There were glitches but they were corrected midway, he said.
"We need to see why the Indian economy was de-coupled from the rest of the economy over 3-4 quarters. Our interest rates went up sharply which affected our competitiveness. We see there is a robust revival. Growth is picking up because the temporary impact of demonetization has decimated. Exports have picked up," he said.
''GST Council shows that cooperative federalism is a technology for reforms in several other areas and from crony capitalism we have now moved to stigmatised capitalism," CEA said.
He exuded hope that exports growth could be higher and private investment could pick up.
There are challenges in the form of rising oil prices and sharp correction in stock prices. Also, to reignite growth, raising investments is more important than raising savings
"The government doesn't have to do anything new or radical. They should finish what they started out. They should stabilise the GST. Privatise Air India. Head off macro economic pressures and possibility of a sudden stall from rising oil prices and sharp correction is stock prices," he said.
He also expressed hope that at least one or two states will implement the idea of universal basic income (UBI) in the next two years.
He in the Economic Survey 2016-17 had mooted the idea of universal basic income or a uniform stipend paid to every adult and child, poor or rich. " ..within the next two years, at least one or two states will implement UBI," Subramanian said.
UBI will guarantee all citizens enough income to cover their basic needs and would be easier to administer than the current anti-poverty schemes, which are plagued by waste, corruption and abuse.
The government's urgent steps to tackle the twin balance sheet challenge and improving the ease of doing business will reignite animal spirits."Export growth could be greater and private investment could also grow if Insolvency and Bankruptcy Code proceedings progress well", Subramanian said.
He said the decisive steps taken by the government to tackle the twin balance sheet issue. The twin balance sheet issue deals with over leveraged companies and banks with NPAs. The government has now put in place Insolvency and Bankruptcy Code (IBC) which provides a resolution framework that will help corporates clean up their balance sheets and reduce debts.
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