State of Indian Economy: Highlights of Economic Survey 2011-12

The Economy Survey 2011-12 was tabled by the Finance Minister Pranab Mukherjee in the Parliament on Thursday. Following are the highlights of Survey, a report card of the Indian economic scenario for current fiscal:

• The country's economic growth estimated at 6.9 per cent in the current fiscal; growth momentum to pick up in next two fiscals to 7.6 per cent 2012-13 and 8.6 per cent in 2013-14.
• 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.
• 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%.
• Industrial growth pegged at 4-5 percent, expected to improve as economic recovery resumes.
• 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.
• 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
• 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.
• Central spending on social services goes up to 18.5% this fiscal from 13.4% in 2006-07.
• MNREGA coverage increases to 5.49 crore households in 2010-11.
• Sustainable development and climate change concerns on high priority.
• 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.
• 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.
• 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.
• 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.
• Forex reserves expanded further, covering almost the entire external debt stock to the country.
• Food grains production likely to cross 250.42 million tonnes; largely on back of increase in rice production.
• 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.
• India much more closely integrated with world economy' share of trade to GDP of goods and services has tripled between 1990-2010.
• A progressive deregulation of interest rates on savings accounts to help raise financial savings and improve transmission of monetary policy.
• Sustainable development and climate change becoming central areas of global concern and India too is equally concerned and engaged constructively in global negotiations.
• 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.