New Delhi/ Mumbai/Jamshedpur, Feb 26 (ANI): India should review its mid-term fiscal strategy, a government report urged on Friday in a possible indication that Finance Minister Arun Jaitley may have to borrow more to raise pay for government employees and bail out banks. The report called India ‘A haven of stability’ in a gloomy international landscape but, as Group of 20 finance ministers gathered for talks in Shanghai, warned too of possible currency turmoil in Asia after China's recent devaluation. The Economic Survey, which sets the scene for Jaitley's third budget on Monday, forecast the Indian economy would grow by between 7.0 percent and 7.75 percent in the 2016/17 fiscal year that starts on April 1. Industry body Associated Chambers of Commerce and Industry of India (ASSOCHAM) asked the government to increase public investment, especially in rural areas, to create jobs. The report flagged steps to broaden India's narrow tax base, arguing that 20 percent of individuals should pay tax on their earnings compared to just 5.5 percent now. The easiest way to do so would be not to raise thresholds on tax breaks and to review and phase out such exemptions. The government will stick to its budget deficit target of 3.9 percent of gross domestic product in the year now drawing to a close, but the coming year will be “challenging” from a fiscal point of view.
