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MOSL: ECOSCOPE-Economic Survey 2017-18—Growth to accelerate to 7-7.5% in FY19-Survey attempts to alleviate concerns around GST

ECOSCOPE: Economic Survey 2017-18—Growth to accelerate to 7-7.5% in FY19; Survey attempts to alleviate concerns around GST

 

• The Economic Survey – the Indian government’s flagship document that reviews the developments in the economy over the past 12 months – pegs India’s growth at 6.75% for FY18, higher than the Central Statistics Office’s (CSO) estimate of 6.5%. It estimates growth to improve to 7%-7.5% in FY19, with downside risks emanating from higher crude oil prices, rising protectionist tendencies, and tighter monetary conditions across the globe.
• According to the Survey, GST collections have been surprisingly robust in the first five months post GST implementation, allaying fears of a shortfall in indirect tax collection. Higher-than-average buoyancy so far implies that GST could be a resilient source of revenue in the future.
• It also points to a sharp 50% increase in the number of unique registered indirect tax payers post GST implementation and computes that the GST tax base (at INR 65-70t) and the implied Revenue Neutral Rate (RNR) at 15.6% are in line with the previous estimates, alleviating concerns surrounding the GST.