New Delhi: Pushing for reforms and tangible action on removing bottlenecks to investment and job creation, India’s Economic Survey for 2012-13 pegs the country’s growth at 6.1-6.7 percent next fiscal, with inflation easing soon to
6.2-6.6 percent.
The survey released hours ahead of the annual budget said India is likely to meet the fiscal deficit target of 5.3 percent of the gross domestic product (GDP) in the financial year that ends on March 31.
The forecast came against the backdrop of a deceleration in growth to around 5 percent and 6.2 percent in the previous two fiscals from 9.3 percent and 8.6 percent in the two fiscals before that, induced largely by the global slowdown and financial crisis.
“The slowdown is a wake-up call for increasing the pace of actions and reforms,” said the survey, adding that India has navigated difficult times as these before, and with good policies and strong reforms programme, it will again come through stronger.
Authored by Chief Economic Advisor Raghuram Rajan, the report card on the state of the economy, with recommendations for the way forward, was tabled in parliament by Finance Minister
P Chidambaram yesterday, a day ahead of the national budget for 2013-14.
Addressing a media conference after release of the survey, Rajan said Indian economy was at a “turning point” and the macro-economic situation would improve in the next financial year, helped by moderate inflation and better external factors.
“India is in a difficult but not impossible situation...we are at or beyond the turning point of the economy,” he said. Rajan, a former chief economist of the International Monetary Fund (IMF), said a wide gap in upper and lower projections of the GDP growth was mainly due to uncertainty prevailing in the economy.
“Given the uncertainty, we are giving wider band,” he said.
The survey also pushed for fast action on the ground after the opening up of the retail trade industry to overseas companies and said this will not just pave the way for flow of investment in new technology, but also for marketing of farm produce in India.
“Fast agricultural growth remains vital for jobs, incomes and food security.”
In the survey, a special chapter has been added focusing on jobs that says the future holds promise for India if it seizes the demographic dividend, with nearly half of the additions to the labour force till 2030 expected in the 30-49 age group.
“Because good jobs are both the pathway to growth as well as the best form of inclusion, India has to think of ways of enabling their creation,” says the survey, adding new jobs are currently being added mainly in informal and low productivity sectors.
Coming a day ahead of the general budget, the survey also calls for widening the tax base and prioritisation of expenditure, holding them as the key ingredients to a credible medium-term fiscal consolidation plan.
“The policy recommendations of the Survey focus largely on stimulating investments and reducing supply bottlenecks particularly in the agricultural sector,” the Confederation of Indian Industry said in a statement.
IANS
