India's Economic Survey Sees Recovery, But With Reforms

"The analysis shows that bottlenecks relate mainly to regulatory hurdles that prevent small firms from growing," the chamber said, adding that India Inc has precisely been stressing on these very issues to stimulate growth.

The survey also expresses concern over the high current account deficit due to a higher share of imports vis a vis exports and says this in the short run must be corrected by cutting oil and gold imports with market-determined prices.

This, the survey argues, is all the more necessary, since the flow of invisibles - such as money in the form of remittances by Indians abroad and software earnings - are not particularly sufficient to cut current account deficit, now at 4 percent of the GDP.

On the controversial issue of land acquisition, the survey seeks a balance between the need for economic growth and the costs imposed on the displaced with proper mapping of land, easier means to facilitate leasing and transparent compensation policy.

On foreign direct investment, the survey notes that India, with a rank of four in the global restrictiveness index, fares better than China, ranked first. Yet, there is scope to reverse the moderation seen last year in inflows of overseas capital.

Accordingly, it calls for a review in increasing the foreign investment cap in a host of areas, notably public sector banks, insurance and defence production as they promise new technology and practices and such capital are better than portfolio investment.

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