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Economic Survey 2011 may peg GDP growth in FY-12 at 9 percent
Friday, 25 February 2011, 19:19 IST
NEW DELHI: The robust performance of the Indian economy during the ongoing fiscal is likely to prompt the government to peg GDP growth in the 2011-12 fiscal at 9 percent, as well as withdraw stimulus measures in the forthcoming Budget.
The Survey, to be tabled by Finance Ministry Pranab Mukherjee, is likely to highlight food inflation and the slow recovery in the euro zone as areas of concern for the domestic economy.
Sources said the Survey will also make a strong case for pushing economic reforms, especially raising caps on foreign direct investment (FDI), with a view to achieving a high growth rate on a sustained basis. In her address to Parliament earlier in the week, President Pratibha Patil had said, "There is no room for complacency. We have to maintain the momentum for reforms on a wide front."
She had also underlined the need for making "the domestic environment more conducive to investment, encouraging public as well as private investment and domestic as well as foreign investment, particularly foreign direct investment."
The Economic Survey, which is tabled in Parliament ahead of the General Budget, is likely to peg the economic growth rate in the current fiscal at 8.6 percent, up from 8 per cent a year ago.
The economy recorded a growth rate of 8 per cent in 2009-10, indicating that it has recovered faster from the impact of the global financial meltdown than anticipated earlier. In the aftermath of the global crisis, the growth rate slipped to 6.8 per cent in 2008-09 from over 9 percent in the three preceding years.
The Prime Minister's Economic Advisory Council (PMEAC) and the World Bank have said that India's growth rate will revert to the pre-crisis level of 9 percent in the next fiscal. In view of the recovery, the Survey is likely to underline the need for getting back on the path of fiscal consolidation by withdrawing the stimulus that was provided to industry to combat the impact of global crisis.
The PMEAC had also suggested withdrawal of the stimulus, which was provided to the industry in the form of tax concessions and a hike in public expenditure.
The series of stimulus packages, however, pushed the fiscal deficit of the government up to 6.3 per cent of the GDP in 2009-10. In the current financial year, according to the PMEAC, the fiscal deficit is expected to slide to 5.2 percent from the earlier estimate of 5.5 percent.
Inflation, however, will continue to be a problem area in view of the rising crude oil and commodity prices in the global market. Following the civilian uprising in the Middle East, crude oil prices have already crossed $105 per barrel.
The development expenditure on social and economic service also increased from about 
11.25 thousand crore in 2005-06 which was 49 percent of the total expenditure, showing an increase of around three times in 2010-11, which amounted to 35.6 thousand crore. The non-developmental expenditure increased moderately from about 11.3 thousand crore to 18.1 thousand crore during the same period, the survey said.
Source: PTI
11.25 thousand crore in 2005-06 which was 49 percent of the total expenditure, showing an increase of around three times in 2010-11, which amounted to 35.6 thousand crore. The non-developmental expenditure increased moderately from about 11.3 thousand crore to 18.1 thousand crore during the same period, the survey said.
Source: PTI