India’s government forecasts economic growth will pick up to 6.0% to 6.5% in the fiscal year beginning April 1, but warned it may have to miss its deficit target to revive growth.


India is facing its worst economic slowdown in a decade. Growth fell to 4.5% in the July-September quarter. Consequently, the budget deficit may need to exceed this year’s target, 3.3% of gross domestic product, the government said in an economic survey released on Friday.


Finance Minister Nirmala Sitharaman will present the budget for the coming fiscal year on Saturday.


“Going forward, considering the urgent priority of the government to revive growth in the economy, the fiscal deficit target may have to be relaxed for the current year,” Krishnamurthy Subramanian, chief economic adviser to the finance ministry, said in the report.


The government estimates GDP will grow 5% this fiscal year, which ends on March 31. That would be the slowest growth since the global financial crisis of 2008-09.


Some economists believe the survey’s growth forecast is too optimistic. They point out economic recovery remains fragile; inflation is accelerating and consumer demand and investments are likely to decline, even though the central bank cut interest rates by 135 basis points in 2019.
In the coming budget, Sitharaman is expected to announce a host of economy-reviving measures. Income tax cuts, higher spending on infrastructure and incentives for real estate are likely. So is a plan to revive stressed shadow banks.


However, the slowdown in growth has reduced tax revenues. The government may be forced to channel its increased spending through quasi-sovereign bodies, which would not be included in its deficit calculations.


Friday’s report said India would need to spend about $1.4 trillion in the next five years to expand the economy to $5 trillion from the current $2.8 trillion. It gave no projection for the deficit. Economists believe that is around 3.8%.


To accommodate higher spending, the deficit might be allowed to grow to at least 3.5%, missing the 3% target for next year, sources and economists have told Reuters.

Over Rs 100 lakh cr to be spent in next 5 yrs on building modern infrastructure: Prez Kovind
The government has decided to invest more than Rs 100 lakh crore on building modern infrastructure in the country with a special emphasis on connectivity, President Ram Nath Kovind said on Friday.


In a bid to improve connectivity, the government will also focus on creation of new highways, waterways, airways and I-ways (IT infrastructure), the President said addressing the joint sitting of both houses of Parliament, on the first day of the Budget session here.


"The poor and the middle-class hope and aspire for a modern 21st century infrastructure in the country. To fulfil this aspiration of the people more than Rs 100 lakh crore will be invested in the next five years. With a special emphasis on connectivity, the government is also focusing on creation of new highways, new waterways, new airways, and new I-ways," the President said.


Rapid progress is being made towards providing better public transport facilities in urban areas, Kovind said adding, metro facility has now been extended to 18 cities in the country.

Around 60 lakh informal sector workers and small traders are covered under the pension schemes launched in 2019, said Kovind,

Last year, the government launched Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM) and Pradhan Mantri Laghu Vyapari Maan-dhan Yojana (PM-LVM) for providing assured minimum pension of Rs 3,000 per month.


"Farmers, agricultural labourers, unorganized sector labourers and small traders of the country had expectations of a pension scheme that would be of help to them in their old age.''


The PM-SYM scheme provides for a minimum monthly assured pension of Rs 3,000 for unorganised sector workers from the age of 60 years. The scheme was launched in February 2019.


The government in the Union Budget 2019-20 set a target of enrolling ten crore workers under the scheme in the next five years.


Any informal sector worker in the age group of 18-40 years can enrol for PM-SYM. The monthly insurance premium ranges from Rs 55 at the age of 18 years to Rs 200 at the age of 40 years. The central government is making equal contributions for these workers under the scheme.

Eco Survey focuses on wealth creation, says PM

The Economic Survey focuses on wealth creation for Indians and outlines a multi-faceted strategy to achieve a USD 5 trillion economy through enterprise, exports and the ease of doing business, Prime Minister Narendra Modi said.


Economic Survey 2019-20 projected the revival of economic growth to 6-6.5 per cent in the next fiscal beginning April 1 but suggested the government should relax the budget deficit target to boost growth from a decade low.

"The #EconomicSurvey 2019-20 focuses on wealth-creation for 130 crore Indians. It outlines a multi-faceted strategy to achieve a $5 trillion economy through enterprise, exports, ease of doing business and more," Modi said on Twitter.