NEW DELHI (Reuters) - India's finance ministry delivered a report on the state of Asia's third-largest economy on Wednesday, a day before Prime Minister Narendra Modi's new government presents its first budget.
The annual report was prepared by Ila Patnaik, a well-respected economist who was appointed as senior economic advisor to the finance ministry in April.
Following are highlights of the report:
GROWTH
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* GDP growth seen at 5.4-5.9 pct in 2014/15.
* Downward risk to economic growth due to poor monsoon, external factors.
FISCAL DEFICIT & TAXATION
* Need for subsidy reforms for fiscal consolidation
* Recommends raising tax-to-GDP ratio for fiscal consolidation
* Shortfall in revenues can be contained through better mobilisation and reforms
* Government needs to move towards simple tax regime, fewer tax exemptions, single rate of goods and services tax
INFLATION
* Wholesale Price Index (WPI)inflation expected to moderate by end-2014
* Government needs to move towards low and stable inflation through fiscal consolidation
* Consumer Price Index (CPI) inflation showing signs of moderation
FOREX MARKET
* Intervention in forex market by Reserve Bank of India is behind accumulation of reserves "generally"
(Compiled by Tommy Wilkes and Aditya Kalra; Editing by Douglas Busvine)
