Fiscal deficit may decline to 3.2 per cent of GDP in 2017-18: Economic Survey

Mumbai: The government on Friday unveiled Mid-Year Economic Survey report that estimates that fiscal deficit is expected to decline to 3.2 per cent of GDP in 2017-18 financial year compared with 3.5 per cent in 2016-17 fiscal.

The Economic Survey also said that achieving upper end of 6.75 per cent to 7.5 per cent real GDP growth predicted in February is difficult. "Structural reform agenda include implementing GST, Air India privatisation, addressing twin balance sheet challenge facing banks," it said.

The survey said that inflation is expected to remain below the Reserve Bank of India's 4 per cent target. It further added that there is considerable scope for monetary policy easing.

The Reserve Bank of India on August 2 had cut benchmark repo rate by 25 basis points to 6 per cent, as it considered June retail inflation figure that was quoted at a record low of 1.54 per cent.

The report noted that there has been a "spurt in new tax payers and reported income after demonetisation". It said that 5.4 lakh new tax payers were added post demonetisation.

Saying that farm loan waivers could touch Rs 2.7 lakh crore, the report predicted that waivers could cut economic demand up to 0.7 per cent of GDP.