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News & Knowledge

India: Key highlights of the 2017 Union Budget

20th February 2017
Chokshi Group

This article by MSI’s Indian accounting member Chokshi Group provides key highlights of the 2017 Union Budget which was announced by India's Finance Minister, Arun Jaitley, on 1 February 2016.

The world has been looking at the changes in our Economy driven for Growth and Stability, and stands out as a bright spot amid world economic gloom. Here is some background to India’s economy:

  • Inflation, which was in double digits, has been controlled; sluggish growth has been replaced by high growth; and a massive war against black money has been launched.
  • The advanced economies are expected to increase their growth from 1.6% to 1.9% and the emerging economies from 4.1% to 4.5%. Growth in a number of emerging economies is expected to recover in 2017, after relatively poor performance in 2016. These are positive signs and point to an optimistic outlook for the next year.
  • CPI inflation declined from 6% in July 2016 to 3.4% in December 2016 and it is expected to remain within RBI’s mandated range of 2% to 6%.
  • India’s Current Account Deficit declined from about 1% of GDP last year to 0.3% of GDP in the first half of 2016-17.
  • Foreign Direct Investment (FDI) increased from Rs. 1,07,000 crores in the first half of last year to Rs. 1,45,000 crores in the first half of 2016-17.
  • Foreign exchange reserves have reached 361 billion US Dollars as on 20 January 2017, which represents a comfortable cover for about 12 months of imports.
  • India has become the sixth largest manufacturing country in the world, up from ninth previously. We are seen as an engine of global growth.
  • Demonetisation, which took the Nation by storm and made the people lose confidence in the Government, now seeks to create a new ‘normal’ wherein the GDP would be bigger, cleaner and real. Drop in economic activity, if any, on account of the currency squeeze during the remonetisation period is expected to have only a transient impact on the economy. The effects of demonetisation are not expected to spill over into the next year.
  • IMF, even while revising India’s GDP forecast for 2016 downwards, has projected a GDP growth of 7.2% and 7.7% in 2017 and 2018 respectively.

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About Chokshi Group - Mumbai

Part of the Chokshi Group, Adarsha Consulting is a professional services firm founded with the goal of providing start ups and mid-market firms with a superior alternative to building and maintaining an in-house accounting, compliance and consulting function.

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