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Union Finance Minister Pranab Mukherjee has tabled the Economic Survey 2009-10 during Budget 2009 session today in parliament.
The Survey witnesses an early revival in the economic growth of India. The Survey has also put Rs 25000 cr as disinvestment target.
Highlights Of Economic Survey 2009-10
- 6-8 LPG cylinders funded per year
- High liquidity could mean inflation spiral
- Capital gains for the 3G spectrum has to be taxed under the IT Act
- FDI in Insurance and Retail sector Need to revitalise disinvestment program
- Government should disinvest 10 % in the unlisted PSUs
- Targeted fiscal deficit is at 3% of the GDP
- Impetrative to return to FRBM target on fiscal deficit 10-11%
- Advise for managing money better
- Asks for watching out inflation
- 100% foreign equity to be allowed in insurance firms of rural areas
- Phasing out of CIT, SIT, SBT
- Trade Sector of 2009 has a very unpleasant outlook with an negative growth in the world output of -1.3%
- Raising the0 FDI in insurance to 49%
- Price control on drugs to be lifted
- Pension bill reforms to be passed
- 49% FDI in defence production
- New Income Tax code to be introduced
- Phasing out the Tax Surcharges
- Reviewing the customs duty exemptions
- Government must decontrol petrol and diesel prices
- Private investment to be permitted in nuclear power
- Separate telecom licenses from spectrum allocation
- Agriculture sector facing challenges on various fronts
- Thrust on irrigation to be increased
- Marketing, storage and warehousing for agricultural sector to be developed
- Blanket fiscal stimulus not required and stimulus has to be sector specific.
- Attempts by RBI to maintain ample liquidity by RBI may be inflationary
- Auction loss making PSUs
- Sell 5-10% of non-profitable Navratnas
- Eliminate inverted duty structure
- Kerosene subsidy only to non-electrified, non-LPG homes
- Economic growth decelerates to 6.7 per cent in 2008-09 compared to 9 per cent in 2007-08 and 9.7 per cent in 2006-07.
- Per capita growth at 4.6 per cent.
- Deceleration in growth spread across all sectors except mining and quarrying; agriculture growth falls from 4.9 per cent in 2007-08 to 1.6 per cent 2008-09.
- Manufacturing grows at 2.4 per cent, slowdown attributed to fall in exports and a decline in domestic demand.
- Global financial meltdown and economic recession in developed economics major contributors in India’s economic slowdown.
- Investment remains relatively floating, ratio of fixed investment to GDP increased to 32.2 per cent in 2008-09 compared to 31.6 per cent in 2007-08.
- Fiscal deficit to GDP ratio stands at 6.2 per cent.
- Credit growth declines in the later part of 2008-09 reflecting slowdown of the economy in general and the industrial sector in particular.
- Increase planned expenditure
- Reduction in indirect taxes
- Sector specific measures for textile, housing, infrastructure through stimulus packages provides support to the real economy.
- Merchandise export grows at a modest 3.6 per cent in US Dollar terms while overall import growth pegged at 14.4%.
- A large domestic market, resilient banking system and a policy of gradual liberalisation of capital account to help early mitigation of the adverse effect of global financial crisis and recession.
- Sharp dip in the growth of private consumption a major concern at this stage.
- Medium to long-term capital flows likely to be lower as long as the de-leveraging process continues in the US economy.
- Revisiting the agenda of pending economic reforms imperative to renew the growth momentum.
