The government today tabled the Economic Survey for 2012-13
(Apr-Mar) in Parliament. Following are the highlights:
GROWTH, INFLATION
* Indian economy likely to grow 6.1-6.7% in FY14
* WPI inflation may decline to 6.2-6.6% in Mar
* Lower inflation to create room for more rate cuts
* Growth downturn more or less over, econ looking up
* WPI inflation is expected to continue moderating trend
* Inflation expectation seen anchored around current target
* Diesel price hike to put upward pressure on inflation
* Rise in onion prices to put upward pressure on inflation
* Food inflation mainly driven by cereal prices this year
* Rate cuts in advanced nations may pose risk to inflation
* WPI inflation has remained muted in FY13
* Apr-Dec WPI average inflation 7.55%
* Non-food non-manufacturing inflation remains high
* Core inflation down on RBI action, fall in global prices
* Lower interest rates to give fillip to investments
* Industry growth still vulnerable to local, global factors
* Revival of investment in industry, infra key challenge
* Lower industrial growth due to sluggish investments
* Services sector shown more resilience than farm, industry
FISCAL HEALTH
* FY13 fisc situation shows sharp improvement over FY12
* Need to stay on path of indicated fiscal consolidation
* FY13 tax mop-up growth significantly lower than Budget aim
* Medium term fiscal consolidation plan credible
* Fiscal consolidation key to higher growth, lower inflation
* Oil subsidy key fiscal risk; need to address it
* Need to up diesel, LPG prices in line with global rates
* Need to accord priority to food subsidy
* Concerns that food security bill may push up subsidy
* Tax mop-up slippage can be lowered with additional efforts
* Controlling subsidy expenditure crucial
* Need to cut subsidy via better targeting, reducing leakage
* Direct cash transfer to cut leakage in subsidies
REFORMS
* Econ slowdown a “wake up call” for stepping up reforms
* Recent govt policy steps buoyed business sentiment
* Recent govt steps to help improve Indian econ outlook FY14
EXTERNAL SECTOR
* Widening trade, current account gaps matter of concern
* Current acct gap reduction must focus on curbing imports
* Need to curb gold imports to cut current acct deficit
* Room to increase exports limited in short-run
* Must monitor overseas borrow to limit unhedged FX exposure
MISCELLANEOUS
* FDI in retail to pave way for investment in technology