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Economic Survey: Highlights

ibnlive.com
Feb 28, 2008 at 12:59pm IST

  • Economy slows down to 8.7% in 2007-08
  • Inflation projected at 4.4 pc in 2007-08
  • 3 manufacturing sector to grow at 9.4 pc in current financial year, lower from 12 pc in 2006-07
  • Lower agriculture growth at 2.6 pc in 2007-08 from 3.8 pc in 2006-07
  • Government sets target of 9 pc GDP growth during 11th Five Year Plan (2007-2012)
  • Maintaining 9% rate challenging
  • Double-digit growth tougher still
  • Deceleration this year was expected
  • Fundamentals "inspire confidence"
  • Investment climate "full of optimism"
  • But labour force growing faster than employment growth
  • Unemployment rate higher by 1pc in five years to 2005
  • Subsidies to increase by Rs 6,550 cr over Budget Estimate
  • Budget estimate for subsidies was Rs 51,247 cr
  • Glosses over off-Budget subsidies
  • Inflation seen at 4.1 pc this year
  • Inflation lower than 5.6 pc last year
  • Inflation mainly led by primary non-food items
  • Fuel and power group prime contributors to inflation

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  • Investment goods inflation declines to 4.3 pc
  • Positive for investment
  • Farm growth seen at 2.6%, against 3.8% a year ago
  • Foodgrain output seen at 219.3 MT against 217.3 MT in FY'07
  • Acceleration in domestic investment, savings drove growth
  • Macroeconomic fundamentals continue to inspire confidence
  • Industrial growth slower at 9 pc in first 9 months of FY'08
  • Costly rupee, sluggish consumer goods and infra a concern
  • Rupee rose by 8.9 pc against USD during current fiscal
  • Average credit growth slowed to 26.8% in FY'07, down in '08
  • Forex reserves up by $91.6 bn to $290.8 bn on Feb 8, 2008
  • GDP projected at Rs 46,93,602 cr (mkt price) in 2007-08
  • Inflation reined despite higher commodity prices & surge in

    capital inflows

  • Cumulative increase in non-food credit by Jan 4, 2008 was 11.8 pc as against 17.5 pc a year ago
  • Capital inflows rise to 7.7 pc of GDP in first half of FY'08 as against 5.1% in FY'07
  • FDI inflows reach $11.2 bn, outward investments surge to $7.3 bn in April-September
  • Exports reach $111 bn in first 9 months of FY'08; imports grow 25.9 pc
  • Surge in capital inflows, including FDI, to continue in

    medium term

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  • Complete the process of selling 5-10% equity in previously identified profit making non-navratna PSUs
  • Phase out control on sugar, fertiliser, drugs
  • Sell old oil fields to private sector
  • Allow a share for foreign equity in all retail trade
  • Raise foreign equity in insurance to 49 pc
  • Allow 100 pc FDI in greenfield private agri-banks
  • State Electricity Regulatory Commissions should notify

    rational, credible, cross subsidy to make open-access viable

  • Increase work week to 60 hours from 48 hours and daily limit

    to 12 hours

  • Introduce new bankruptcy law that facilitates exit of old/

    failed management as expeditiously as possible

  • Public sector Rail Track company to own new tracks and

    signals

  • Situation of excess inflows is likely to remain, though the

    pressure on reserve accumulation and exchange rate

    appreciation is likely to ease

  • Urgent need to place the highest priority on building roads
  • Urban land ceiling laws and limitations of rent control acts

    needs to be urgently addressed

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  • Irrigation a major constraint on raising crop productivity
  • Urgent need for a regime that supports predictable user

    charges, a financial system that allocates risk efficiently,

    and project selection based on sound commercial and legal

    principles to ensure transparency

  • Import dependence to meet energy needs should be reduced by tapping coal reserves, accelerating exploration of oil and gas and fully exploiting the nuclear and hydro potential for

    power generation

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