The Economic Survey for 2011-12 tabled by finance minister Pranab Mukherjee in Parliament projected a growth rate of 7.6% for the next fiscal year beginning 1st April 2012. On other hand Inflation is projected at 6.5-7% by the end of March. The survey also said that inflation t may further moderate during 2012-13 due to tightening of monetary policy and other measures put in place by the government.
The growth in the country’s gross domestic product (GDP) during the current fiscal has been pegged at 6.9%. The country’s GDP growth had decelerated to 6.1% in third quarter from 6.9% in the second quarter of the current fiscal.
“But despite the low growth figure of 6.9%, India remains one of the fastest growing economies of the world as all major countries including the fast growing emerging economies are seeing a significant slowdown.”
According to the survey, industrial production is likely to improve in the next financial year. The survey assumes significance in the backdrop of the global economic slowdown, high international oil prices and falling domestic investment. It is also likely to focus on the ways and means for India to achieve double digit GDP growth and also move ahead with economic reforms. The economic survey is tabled in Parliament a day before the presentation of the union budget.
The Survey was presented by Dr Kaushik Basu — who comes to the end of his three year term as Chief Economic Adviser of Government of India.
Following are the highlights of the Economy Survey 2011-12, a report card of the Indian economic scenario for current fiscal, presented by Finance Minister Pranab Mukherjee in Lok Sabha on March 15, 2012:
- The country’s economic growth estimated at 6.9 per cent in the current fiscal; growth momentum to pick up in next two fiscals to 7.6 per cent 2012-13 and 8.6 per cent in 2013-14.
- RBI expected to lower policy interest rates, as inflationary pressures expected to ease in coming months; A low interest rate regime to encourage investment activity and push forward economic growth.
- Steps required for deepening of domestic financial markets, especially corporate bond market and attracting longer-term inflows from abroad; Efforts at attracting dedicated infrastructure funds have begun.
- The growth rate of investment in the economy is estimated to have declined significantly; borrowing costs up due to a sharp increase in interest rates.
- High borrowing costs and increase in other costs affecting profitability and internal accruals.
- Slowdown in Indian economy largely due to global factors, as also because of domestic factors like tightening of monetary policy, high inflation and slower investment and industrial activities.
- Inflation high, but showing clear signs of slowdown by the year-end; Whole-sale food inflation down to 1.6 per cent in January 2012 from 20.2 per cent in February 2010.
- India remains one of the fastest growing economies of the world; Country’s sovereign credit rating rose by a substantial 2.98 per cent 2007-12.
- Exports grew by 40.5 per cent in the first half of this fiscal and imports grew by 30.4 per cent; Foreign trade performance to remain key driver of growth.
- Forex reserves expanded further, covering almost the entire external debt stock to the country.
- Food grains production likely to cross 250.42 million tonnes; largely on back of increase in rice production.
- Agriculture and Services sectors expected to perform well; Industrial growth pegged at 4-5 per cent and improve further as economic recovery resumes.
- Global economy remains fragile and concerted efforts needed to restore stability and renewed growth; Steps needed for sovereign debt crisis, financial regulation, growth and job creation efforts and energy security, globally.
- India much more closely integrated with world economy’ share of trade to GDP of goods and services has tripled between 1990-2010.
- A progressive deregulation of interest rates on savings accounts to help raise financial savings and improve transmission of monetary policy.
- Sustainable development and climate change becoming central areas of global concern and India too is equally concerned and engaged constructively in global negotiations.