Bikky Khosla | 30 Jan, 2018
The
Economic Survey, released by the government on Monday, paints a
bright picture for the economy's short
and medium term growth. It
views the economy should grow 6.75
percent this fiscal and 7.0
to 7.5 percent in 2018-19, riding
on the series of reforms undertaken over the past year. This level of
growth, the survey adds, will reinstate
India as the world's fastest growing major economy. All
these sound positive.
On
exports, the survey views that the global economy, as per the upward
revision of the earlier projections by the IMF, is gathering pace and
is expected to accelerate from 3.2 percent in 2016 to
3.6 percent in 2017 and 3.7 percent in 2018. This, in turn, should
boost India's exports. This
view, along with mention about some possible global risks,
particularly related to global
stock markets, sound
logical.
On
the MSME sector, the survey points out lack of credit as a
major
obstacle. Mentioning latest data on credit disbursed by banks, the
survey states that out of a total outstanding credit of Rs. 26041
billion as in November 2017, 82.6 percent of the amount was lent to
large enterprises. The MSME sector
received only 17.4 percent of the total credit outstanding. This is a
major concern, considering the sectorsâ massive contribution to
exports and employment generation.
Considering
the above, it will be interesting to see what measures the Budget
comes with for these two sectors. The survey shows that the Rebate of
State Levies (ROSL) has increased exports of ready-made garments by
about 16 percent. So, it is clear now that exports incentives do
work, and I hope the Budget will introduce some explicit sops for the
sector. Similarly, it will be interesting to see what measures the
Budget comes with to address the credit woes of the MSME sector.
I
invite your opinions.
