Economic Survey II: Optimism and anxieties

Survey remarks that current repo rate of 6% is about 25-75 bps above the neutral rate

The analysis on the state of the economy presented in the Economic Survey-II, refreshingly lays bare both the optimism about the medium-term outlook, as well as the anxiety that is building in the immediate term.

Optimism stems from the structural reforms and policy decisions being taken by the government and the Reserve Bank of India (RBI), and the pervasive macro-economic stability that these have engendered. Anxiety is attributed to factors such as the continuing twin balance sheet problem, short-term costs of demonetisation and the transition to the goods and services tax (GST), the fiscal impact of crop loan waivers and