Finance Minister Arun Jaitley in Rajya Sabha (upper house).
The 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:
FISCAL DEFICIT* India needs sharp fiscal correction
* Fiscal situation of the central government is worse than it appears
* 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
* External debt remains within manageable limits
GROWTH* GDP growth seen at 5.4-5.9 pct in 2014/15.
* Downward risk to economic growth due to poor monsoon, external factors.
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
* Needs to create a competitive national market for food
SUBSIDIES* Rationalization of subsidies such as fertilizer and food essential
* Need to shift subsidy programme from price subsidies to income support
TAXATION* Government needs to move towards simple tax regime, fewer tax exemptions, single rate of goods and services tax
FOREX MARKET* Intervention in forex market by Reserve Bank of India is behind accumulation of reserves "generally"
© Thomson Reuters 2014