New Delhi: The Economic Survey 2016-17, which was tabled in Parliament on Tuesday, has predicted that Demonetisation will pose a risk to economic growth in the coming financial year starting April 1, with the economy likely to expand at a slower pace.
It has also advocated a Universal Basic Income as an alternative to subsidy schemes to alleviate poverty and hinted that the Budget to be unveiled on Wednesday may contain measures to prop up growth.
Here are the highlights that sum up what the Economic Survey 2016-17 hints at:
1. “Individual income tax rates and real estate stamp duties could be reduced”
This may be a pointer towards rejigging tax slabs or lowering I-T rates to give a boost to consumer demand by putting more income in the hands of the salaried middle class. For the middle-class hit by the cash crunch post demonetization, this would be a great relief.
2. “The income tax net could be widened gradually and, consistent with constitutional arrangements, could progressively encompass all high incomes”
Is this an indication that a “super rich” tax is in the offing, as the buzz suggests, to rid the government of its ‘suit-boot’ image?
3. “One radical idea to consider is the provision of a universal basic income as an alternative to state subsidies”
Now, there has been a lot of chatter on this one, a new umbrella social security scheme that could also help rake in votes in tonnes. Think of it as NREGA without manual labour, the government could actually announce it. Maybe not universal, but a more targeted scheme aimed at Below Poverty Line households.
4. “The timetable for reducing the corporate tax rate could be accelerated”
Again, a standard demand from private industry, but will the budget deliver on this front in order to kickstart private investments, which have stalled? Now is the time. Capacity utilization is at an all-time low, and fresh investments are hard to come by after the demonetization shock.
5. Farm sector to grow at 4.1% from 1.2% last year
Good tidings for the agricultural sector, will there be more schemes to support the growth? Now, with a sweet little farm-loan waiver, we can give a leg up to the farmer. And if that happens, expect Opposition to cry foul as it would come just ahead of assembly polls to five states.