Economic Survey warns about sustained deflation

India Infoline News Service | Mumbai | August 13, 2017 10:14 IST

The second edition of Economic Survey 2016-17 emphasised that oil market is very different today than it was a few years ago.

Analytic Research
The second edition of Economic Survey 2016-17 emphasised that oil market is very different today than it was a few years ago. The risk of oil prices rising beyond a point has been limited, noted the mammoth survey conducted by the government which was tabled in the Parliament on Friday.
 
The new volume of Economic Survey also cautioned about the dangers of a sustained deflationary trend on farm revenue and the twin balance sheet problem of stressed corporates and bank financials.
 
“Examining if India is undergoing a structural shift in the inflationary process toward low inflation, the survey notes that the oil market is very different today than a few years ago in a way that imparts a downward bias to oil prices, or at least has capped the upside risks to oil prices,” the government said in a release.
 
“Also, farm loan waivers could reduce aggregate demand by as much as 0.7% of GDP, imparting a significant deflationary shock to an economy,” the survey stated.

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