Highlights of Economic Survey

By | February 27, 2013

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

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