31/01/2017 2:22 PM IST | Updated 31/01/2017 3:14 PM IST

India's Economy To Grow Between 6.75% And 7.5% In Coming Fiscal Year: Economic Survey

It described Universal Basic Income as "a powerful idea, but not ripe for implementation".

Amit Dave / Reuters

India's economy is expected to grow between 6.75 and 7.5 percent in the coming fiscal, according to the Finance Ministry's pre-budget Economic Survey tabled in the Parliament on Tuesday.

For 2017-18, the survey expects that growth would return to normal as new currency notes come back into circulation.

While making optimistic projections overall, the survey mainly stuck to economic data so far from the April-November period, before the government's November 8 decision to scrap 86 per cent of the country's currency was taken.

According to the survey, the industrial sector's growth rate is expected to fall to 5.2 per cent in 2016-17 from 7.4 per cent in 2015-16. In the April-November 2016-17 period, India only saw a modest growth of 0.4 per cent in the Index of Industrial Production (IIP).

The services sector is estimated to grow at 8.9 per cent in 2016-17, flat from last fiscal, said the survey, attributable in part to the "public administration, defence and other services" and the payouts of the Seventh Pay Commission, said the survey.

Growth rates in agriculture sector are estimated to increase to 4.1 per cent in 2016-17 from 1.2 per cent in 2015-16, thanks to a good monsoon season than the previous two years.

The survey's forecasts will form the basis of Finance Minister Arun Jaitley's annual budget on Wednesday. Jaitley is widely expected to offer some tax sops to individuals and businesses to spur demand following the government's radical demonetisation move, which included the scrapping of about 86 per cent of India's economy.

On fiscal deficit, the survey warned that government pay increases and muted tax receipts could put pressure on the fiscal deficit in the coming fiscal year.

Some government officials had earlier said that Jaitley may allow the federal deficit to overshoot an earlier target of 3 percent of gross domestic product to create room for public investment.

The survey also talked about the challenges of the widely-anticipated Universal Basic Income, saying it would cost between 4 and 5 percent of GDP. It said UBI is "a powerful idea, but not ripe for implementation".

With Reuters inputs