Highlights of Economic Survey 2009-10

  • Economic growth decelerates to 6.7 per cent in 2008-09 compared to 9 per cent in 2007-08 and 9.7 per cent in 2006-07. Economy likely to grow by up to 8.75 per cent in 2010-11
  • Full recovery; return to 9 per cent growth in 2011-12
  • Gross fiscal deficit pegged at 6.5 pc of GDP in 2009-10
  • Per capita growth at 4.6 per cent. 
  • Increase planned expenditure
  • Investment remains relatively floating, ratio of fixed investment to GDP increased to 32.2 per cent in 2008-09 compared to 31.6 per cent in 2007-08.
  • Revisiting the agenda of pending economic reforms imperative to renew the growth momentum.
  • Broad recovery gives scope for gradual stimulus roll back
  • High double-digit food inflation in 2009-10 major concern
  • Signs of food inflation spreading to other sectors
  • Agriculture sector facing challenges on various fronts.
  • Farm & allied sector production falls 0.2% in 2009-10.
  • Need serious policy initiatives for 4% agriculture growth
  • Govt initiates steps to boost private investment in agriculture
  • Wants credit available at reasonable rates on time for private sector to invest in agriculture
  • Moots direct food subsidy via food coupons to households
  • Favours making available food in open market
  • Favours monthly ration coupons usable anywhere for poor
  • Exports in April-December 2009 down 20.3 per cent
  • Imports in April-December 2009 down 23.6 per cent
  • Trade gap narrowed to USD 76.24 bn in April-December.
  • 32.5% savings & 34.9% investment (of GDP in 2008-09) put India in league of world's fastest growing nations.
  • Slowdown in infrastructure that began in 2007, arrested
  • Sector specific measures for textile, housing, infrastructure through stimulus packages provides support to the real economy.
  • Domestic oil production to rise 11 per cent in 2009-10
  • Kerosene subsidy only to non-electrified, non-LPG homes
  • 6-8 LPG cylinders funded per year
  • Gas output up 52.8 per cent to 50.2 billion cubic meters with RIL starting production
  • India world's 2nd largest wireless network with 525.1 million mobile users
  • Virtually every second Indian has access to phone
  • Separate telecom licenses from spectrum allocation
  • Auction for 3G spectrum to provide existing and foreign players to bring in new technology and innovations.
  • High liquidity could mean inflation spiral
  • Capital gains for the 3G spectrum has to be taxed under the IT Act
  • FDI in Insurance and Retail sector Need to revitalise disinvestment program
  • Government should disinvest 10 % in the unlisted PSUs
  • Impetrative to return to FRBM target on fiscal deficit 10-11%
  • Advise for managing money better
  • 100% foreign equity to be allowed in insurance firms of rural areas
  • Phasing out of CIT, SIT, SBT
  • Trade Sector of 2009 has a very unpleasant outlook with an negative growth in the world output of -1.3%
  • Raising the FDI in insurance to 49%
  • 49% FDI in defence production
  • Price control on drugs to be lifted
  • Pension bill reforms to be passed
  • India 10th largest gold holding nation at 557.7 tonnes
  • New Income Tax code to be introduced
  • Phasing out the Tax Surcharges
  • Reduction in indirect taxes
  • Reviewing the customs duty exemptions
  • Government must decontrol petrol and diesel prices
  • Private investment to be permitted in nuclear power
  • Thrust on irrigation to be increased
  • Marketing, storage and warehousing for agricultural sector to be developed
  • Blanket fiscal stimulus not required and stimulus has to be sector specific.
  • Attempts by RBI to maintain ample liquidity by RBI may be inflationary
  • Auction loss making PSUs
  • Sell 5-10% of non-profitable Navratnas
  • Eliminate inverted duty structure
  • Deceleration in growth spread across all sectors except mining and quarrying; agriculture growth falls from 4.9 per cent in 2007-08 to 1.6 per cent 2008-09.
  • Manufacturing grows at 2.4 per cent, slowdown attributed to fall in exports and a decline in domestic demand.
  • Global financial meltdown and economic recession in developed economics major contributors in India’s economic slowdown.
  • Credit growth declines in the later part of 2008-09 reflecting slowdown of the economy in general and the industrial sector in particular.
  • Merchandise export grows at a modest 3.6 per cent in US Dollar terms while overall import growth pegged at 14.4%.
  • A large domestic market, resilient banking system and a policy of gradual liberalisation of capital account to help early mitigation of the adverse effect of global financial crisis and recession.
  • Sharp dip in the growth of private consumption a major concern at this stage.
  • Medium to long-term capital flows likely to be lower as long as the de-leveraging process continues in the US economy.
Source: http://indiabudget.nic.in/es2009-10/esmain.htm

 



 

 

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