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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