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.Also read: Explainer: Everything You Wanted to Know About the Economic Survey
The Economic Survey estimates that the economy will grow between 6.75% to 7.5% next fiscal. The lower range of this estimate is below the 7.1% growth estimated for FY 2016-17.
Sounding a pessimistic note, the Economic Survey has said that the oil price windfall enjoyed by the government will not be there next year and that manufacturing and services sector growth will slow, although the outlook for agricultural growth is bright.
Industrial sector growth will come down to 5.2% in 2016-17 from 7.4% in 2015-16 while the services sector will grow at 8.8% in FY 2016-17. Agriculture sector growth will accelerate to 4.1% in the coming year, from 1.2% in 2015-16, which was a drought year.Also Read: Economic Survey Lauds Universal Basic Income: Here's What It Is
The survey also says that an economic recovery post demonetisation will require strong policy support, hinting at steps that may be unveiled in the budget to support the economy, possibly through cash transfers for the poor and income tax cuts for the salaried middle class.
It has also made a strong pitch for rolling out a universal basic income, saying that it is an alternative to a plethora of state subsidies meant to alleviate poverty.
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