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Not for Growth
Sticking to the firm commitment to contain fiscal deficits, the reduced thrust on government spending does not seek to be countercyclical given that economic growth is falling. There is vast scope to step up collection of corporate taxes by widening the tax base through greater compliance.
The author wishes to thank R Krishnaswamy for his valuable suggestions on an earlier version of this article.
In a departure from the regular practice of relying on advance estimates of gross domestic product (GDP) provided by the Central Statistics Office (CSO), the Union Budget 2017–18 has relied on its own revised estimates of GDP for 2016–17. In early January, the CSO released the first advance estimates of GDP which stood at ₹1,51,92,588 crore for 2016–17 (CSO 2017). The budget however revised the GDP to ₹1,50,75,429 crore;1 a reduction in the absolute size of the GDP by ₹1,17,159 crore by 0.8%.
Compared to the 10% growth registered in 2015–16,2 nominal GDP is expected to grow by 11.1% in 2016–17 according to the CSO’s advance estimates and by 10.2% as per the budget’s revised estimates. Against 7.9% recorded in 2015–16, the real GDP growth rate is expected to fall in 2016–17 to 7% and 6.2%, respectively, as per the CSO’s advance estimates and the budget’s revised estimates.
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