Topic Of The Day:-“Rate of growth”
Leaving aside these issues, what are some key conclusions? One, on the growth rate, while adhering to the forecast in Volume 1 for real GDP growth of 6.75%-7.5% this year, it suggests that the balance of risk has shifted to the downward side of the range. In plain language, this means a sub-7% rate of growth. Just one day prior to the Economic Survey, the Finance Minister presented to Parliament the Medium-Term Expenditure Framework statement in pursuance of the Fiscal Responsibility and Budget Management Act, 2003. This was “essentially a vertical expansion of the aggregates of expenditure in the fiscal framework presented with the Annual Financial Statement to provide closer integration between Budget and FRBM Statements”. In this statement, some of the subsequent developments both on the revenue and expenditure side like the Goods and Services Tax (GST) and the Seventh Pay Commission have also been factored. This framework assumes that nominal GDP growth for the current (2017-18) and subsequent two years would be 11.75%, 12.3% and 12.3%, respectively. Assuming inflation to be in the acceptable range of about 4%, the expected growth would be 7% plus. No doubt, the savings and investment ratio has declined in recent years. To sustain the projected rates of growth, the savings-investment ratio would need to be increased, which is contingent on continuation of structural reforms, reducing public dis-savings through privatisations such as Air India and other measures to boost savings to earlier highfigures in the mid-thirties. The demand boost inevitably comes from domestic consumption which accounted for about 96% of GDP growth in FY 2017. This is likely to continue. The projections also implicitly accept the fiscal deficit of 3.2% in the current year and 3% for the subsequent two years.
MEANINGS AND WORDS
1) Pursuance
Meaning: Engagement in an activity or course of action.
Example: You have a right to use public areas in the pursuance of your lawful hobby.
Synonyms: Execution, Discharge
2) Contingent
Meaning: Subject to chance.
Example: The contingent nature of the job.
Synonyms: Chance, Accidental
Antonyms: Predictable
3) Dissavings
Meaning: The excess amount spent;The action of spending more than one has earned in a given period.
Example: Dissaving results when consumption is greater than income and is essentially the opposite of saving.
4) Inevitably
Meaning: As is certain to happen; unavoidably.
Example: Inevitably some details are already out of date.
Synonyms: Naturally, Automatically
