Tabled in Parliament on Friday by finance minister Arun Jaitley and authored by a team led by chief economic advisor Arvind Subramanian, the annual report card on the state of the economy said the growth should now rise further and double digit expansion was a possibility.
On inflation, the survey said, there has been a fall of over 6 percentage points since 2013, even as the external sector, which includes exports and inflow of foreign funds, was returning to a path of strength and resilience. Industrial growth has also picked up now.
It also had some good news to report on the farm sector. "Foodgrain production for year 2014-15 is estimated at 257.07 million tonnes and will exceed that of last years by 8.5 million tonnes."
It also made a case for rationalisation of subsidies and said such doles did not appear to have had a transformative effect on the living standards of the poor. On the fiscal side, it said the government was committed to consolidation with revenue generation a priority.
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"India has reached a sweet spot and that there is a scope for Big Bang reforms now," the report said.
"A clear mandate for reform and a benign external environment now is expected to propel India on a double-digit trajectory."
The forecasts mark an acceleration from growth of 7.4 percent in the fiscal year now ending, giving Prime Minister Narendra Modi a chance to commit more funds to investment without resorting to deficit financing.
India can balance the short-term imperative of boosting public investment to revitalise growth with fiscal discipline, the report authored by economist Arvind Subramanian said.
It reiterated that the government would not overshoot its deficit target of 4.1 percent of gross domestic product in the current fiscal year just ending, and stood by a medium-term target of cutting it to 3 percent of GDP.
Inflation is on a declining trend, the report also said, while overhauling of state subsidies would pave the way to rationalise expenditure.
(With inputs from agencies)
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