Demonetisation Led to Rise in Financial Savings, Says Economic Survey 2018

New Delhi: Finance Minister Arun Jaitley tabled the Economic Survey in Parliament on Monday.

The document, prepared by Chief Economic Adviser Arvind Subramanian and his team assessing the economic condition of the country, stated that the country’s financial savings have benefited due to demonetisation.

“India’s unprecedented climb to historic high levels of investment and saving rates in the mid-2000s has been followed by a pronounced, albeit gradual decline. This current episode of investment and saving slowdown is still ongoing. The ratio of domestic saving to GDP reached 29.2 percent in 2013 to a peak of 38.3 percent in 2007, before falling back to 29 percent in 2016. Post which it has been growing” stated the survey document.

It also said that the country grew at 6.75 percent in the ongoing financial year, showcasing the least growth in the last four years.

“A series of major reforms undertaken over the past year will allow real GDP growth to reach 6.75 percent this fiscal and will rise to 7.0 to 7.5 percent in 2018-19,” said the Economic Survey document presented in Parliament on Monday.

According to data provided by Central Statistics Office (CSO), GDP numbers for India were at 7.5% in 2014-15, 8 percent in 2015-16, 7.1% in 2016-17 and 6.75 percent in 2017-18.

The survey also analysed data generated after introduction of the goods and services tax (GST) bill, revealing positive news for the finance ministry.

“There has been a 50 percent increase in the number of indirect taxpayers; and a large increase in voluntary registrations, especially by small enterprises that buy from large enterprises and want to avail themselves the input tax credits,” said the survey.

The survey brought further good news for the economy by stating that inflation during 2017-18 averaged to the lowest in the last six years

“Inflation in the country continued to moderate during 2017-18. Consumer Price Index (CPI) based headline inflation averaged 3.3 percent during the period which is the lowest in the last six financial years.

CPI food inflation averaged around one percent during April-December in the current financial year, said the survey.