Economic Survey data fuels hopes of good budget

The Economic Survey tabled by the government as part of the pre-budget session buoyed the market throughout the trading session on Monday. The stock markets traded near their all-time high in a rangebound manner. BSE Sensex was up 200 to 300 points during the day, closing at 36,283.25, up 232.81 points or 0.65 per cent. 

Deriving many data points from the implementation of GST, as a precedent, the survey details statewise international exports and draws a strong correlation between exports and the states' standard of living. Gujarat, Karnataka, Maharashtra, Telangana and Tamil Nadu account for around 70 per cent of the total exports. The survey expects export growth of 12.1 per cent for FY18.

The survey expects real GDP growth at 6.75 per cent this fiscal, which is expected to will rise to 7 to 7.5 per cent in FY2018-19. The survey reported that more than 60 per cent of India's GDP is fueled by internal trade. The survey sees potential upsides in exports, a pick-up in private investment and greater stability in GST revenues, with 50 per cent increase in indirect taxpayer base. 

On the other hand, the survey cautions on macro pressures that may arise from high oil prices and sudden drop in the inflow of capital. The survey also warns about a sharp correction in the stock markets, which currently are at trading at all-time highs as part of the ongoing trends across international stock exchanges. 

The survey also reiterated government focus in the areas of agriculture, employment generation and education for the medium term. The government's agenda for the year ahead also prioritize resolution of banking sector NPAs and recapitalization, privatization of Air India and keeping a vigil on threats to macroeconomic stability.