Economic Survey: 2011-12

The annual Economic Survey, coming as it does a day or two before the budget, is all about summarizing all critical data and presenting a transparent and unprejudiced view of the economy. Few highlights of the Economic Survey 2011-12 are as follows: 1. Rate of growth estimated to be 6.9%. Outlook for growth and stability is promising with real GDP growth expected to pick up to 7.6% in 2012-13 and 8.6% in 2013-14.

2. Agriculture and Services sectors continue to perform well. 2.5 % growth in Agro sector forecast. Services sector grows by 9.4 %, its share in GDP goes up to 59%.

3. Industrial growth pegged at 4-5 percent, expected to improve as economic recovery resumes.

4. Inflation on WPI was high but showed clear slow down by the year-end; this is likely to spur investment activities leading to positive impact on growth.

5. WPI food inflation dropped from 20.2% in February 2010 to 1.6% in January 2012; calibrated steps initiated to rein-in inflation on top priority.

6. India remains among the fastest growing economies of the world. Country’s sovereign credit rating rose by a substantial 2.98 percent in 2007-12.

7. Fiscal consolidation on track - savings & capital formation expected to rise.

8. Exports grew @ 40.5% in the first half of this fiscal and imports grew by 30.4%. Foreign trade performance to remain a key driver of growth. Forex reserves enhanced - covering nearly the entire external debt stock.

9. Central spending on social services goes up to 18.5% this fiscal from 13.4% in 2006-07.

10. MNREGA coverage increases to 5.49 crore households in 2010-11.

11. Sustainable development and climate change becoming central areas of global concern and India too is equally concerned and engaged constructively in global negotiations.

12. 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.

13. 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.

14. 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.

15. High borrowing costs and increase in other costs affecting profitability and internal accruals.

16. 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.

17. 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.

18. India much more closely integrated with world economy' share of trade to GDP of goods and services has tripled between 1990-2010.

19. A progressive deregulation of interest rates on savings accounts to help raise financial savings and improve transmission of monetary policy.

20. FDI in multi-brand retail can come into effect in a "phased" manner, beginning from metropolitan cities. The survey said that allowing foreign direct investment in multi-brand retail is one of the major issues in the services sector, but the move would address problems relating to food inflation.