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Economy to grow by 9 % in 2011-12: Survey
India's economy will revert to the pre-crisis growth level of 9 per cent in the next fiscal, buoyed by strong fundamentals, the Economic Survey 2010-11 predicted on Friday.
"Based on the performance of the economy over the last five years and analysis of the underlying trends... India's real GDP is expected to grow by 9 per cent (+/-0.25) in 2011-12," the pre-Budget Survey tabled in Parliament on Friday said.
For the current fiscal, the economy is expected to grow at 8.6 per cent, it said.
The Indian economy had grown at a rate above 9 per cent for three consecutive years, starting 2005-06, the Survey said, adding, "So the economy is expected to revert to pre-crisis growth levels next year."
It further said that the growth is broad-based, with a rebound in agriculture output and continued momentum in manufacturing and private services.
The agriculture sector is likely to grow at the rate of 5.4 per cent in 2010-11, while industrial output is expected to grow by 8.6 per cent and the manufacturing sector is likely to register 9.1 per cent expansion, it added.
The Survey brings to the fore that exports had an impressive growth of 29.5 percent from April to December and imports increased by 19 percent in the same period.
It points out that the trade gap has narrowed to over 82 billion US dollars in the first nine month of the current fiscal. The gross fiscal deficit stands at 4.8 percent which is 1.5 percent less than last fiscal.
The spending in social sector programmes has increased by five percent of the GDP over past five years. The rise in GDP in market prices is 9.7 percent and the production of food grains estimated at over 232 million tonne.
The Survey says that the inflation is expected to be 1.5 percent higher than what it would be if India was not on growth path. The Survey points out that forex reserves are estimated to be over 297 billion.
The Survey says that robust growth and steady fiscal consolidation are the hallmark of the Indian Economy.
It makes it clear that fundamentals of Indian Economy are strong and the growth is based with rebound in agriculture and continued momentum in manufacturing and private services. The Survey also says that Savings and Investments are going up and inflation is falling.
Following are the highlights of Economic Survey for the fiscal year 201011, presented in Parliament on Friday:
* Economy to grow at 8.6 per cent in 2010-11 and 9 per cent in the next fiscal.
* Gross Fiscal Deficit stands at 4.8 per cent of GDP in, down from 6.3 per cent last year.
*Inflation expected to be 1.5 per cent higher than what it would be if the economy were not on growth path.
* Economy sees broad-based growth; rebound in farm and continued momentum in manufacturing, private services.
*Fundamentals strong with growing savings and investments, rapid rise in exports.
* Industrial output grows by 8.6 per cent; manufacturing sector registers 9.1 per cent.
* Exports in April-December 2010 up 29.5 per cent; imports up 19 per cent.
* Trade gap narrowed to USD 82.01 billion in Apr-Dec 2010.
* Food inflation, higher commodity prices and volatility in global commodity markets cause of concern.
* Inflation continues to be high; need to monitor emerging trends in inflation on a sequential monthly basis.
* To check food inflation, the government should improve delivery mechanisms by strengthening institutions and addressing corruption.
* Savings rate has gone up to 33.7 per cent, while the investment rate is up at 36.5 per cent of GDP.
* Rising food inflation underlines need for larger investment in farming, enroute to 2nd Green Revolution.
* Net bank credit grows by 59 per cent.
* Social programme spending stepped up by 5 percentage points of GDP over past 5 years.
* Production of foodgrains estimated at 232.1 mn tonnes.
* Forex Reserves estimated at USD 297.3 billion.
* Accelerated investments needed in infrastructure to address delays,cost overruns, regulatory impediments.
* Telecom sector did exceedingly well; role of services sector as the potential growth engine laudable.
* Policies needed to promote new areas such as accounting, legal, tourism, education, financial and other services.
* Economic growth to be faster than ever before in next two decades.
* Need for efficient taxation of goods and services by a new GST regime.
* Improve convergence of social and financial inclusion schemes to check unemployment, poverty and leakages.
* Reform university and higher education; correct demand supply mismatch in job market.
* Meet resource gap in higher education through public private partnership, with regulatory oversight.
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