India could be the fastest growing economy, says Eco Survey

25/02/2010
India could be the fastest growing economy, says Eco Survey
New Delhi: Enthused by reforms and the strong fundamentals, the Economic Survey on Thursday predicted that India would bounce back to a high nine per cent growth in 2011-12 on the way to becoming world's fastest growing economy in four years.

The document, which assesses the state of the economy, warned that high food prices would rise further over next few months and criticised the food management policies that have led to "unacceptably" high prices of items like sugar.

Inflation a concern

Food inflation is at present hovering close to 18 per cent. The pre-budget Survey (2009-10), presented by Finance Minister Pranab Mukherjee in Parliament, also recommended a "gradual rollback" of stimulus measures after assessing the impact on each sector.

India could be the fastest growing economy

Projecting the economic growth to touch up to 8.75 per cent in 2010-11 and nine per cent in the next year, the Survey said: "It is entirely possible for India to move into the rarefied domain of double digit growth and even attempt to don the mantle" of the fastest growing economy in the world within the next four years.

It, however, expressed concern over rising prices, saying that a major concern during 2009-10 was the emergence of high double digit food inflation.

Full recovery

Finance Minister Pranab Mukherjee said that projections indicate a full recovery from the impact of the global economic slowdown.

However, the Survey pointed out that the early signs of pick-up are due to low base and the export value is even lower than the absolute value of the pre-crisis period.

It also expressed concerns over the leading economies like the US resorting to protectionist measures.

"The high employment rates in some developed countries forcing even world leaders like the US to resort to protectionist measures, as in the case of the recent tax breaks for companies giving jobs in the US, could give wrong signal," it said.

The Survey further said that the extraordinary financial stimulus given by different countries, including India, have contributed to the recovery.

Export to China, Japan growing

Imports growth of some of India's trading partner like China, Hong Kong and Japan were encouraging in December 2009.

While China's imports from India grew by 71 per cent in December 2009, Japan imports went up by 3 per cent. Growth in Hong Kong imports from India turned highly positive at 58.5 per cent.

"Even in case of the US, which is still registering negative import growth, the extent of negative growth has become less, with imports from India growing at (-) 10 per cent in November 2009," it said.

Other highlights of Economic Survey 2009-10:

* Economy likely to grow by up to 8.75 per cent in 2010-11

* Full recovery; return to 9 per cent growth in 2011-12

* Broad recovery gives scope for gradual stimulus roll back

* High double-digit food inflation in 2009-10 major concern

* Signs of food inflation spreading to other sectors

* Farm & allied sector production falls 0.2% in 2009-10

* Need serious policy initiatives for 4% agriculture growth

* Moots direct food subsidy via food coupons to households

* Favours making available food in open mkt

* Favours monthly ration coupons usable anywhere for poor

* Gross fiscal deficit pegged at 6.5 pc of GDP in 2009-10

* India 10th largest gold holding nation at 557.7 tonnes

* Exports in April-December 2009 down 20.3 per cent

* Imports in April-December 2009 down 23.6 per cent

* Trade gap narrowed to USD 76.24 bn in April-December.

* 32.5% savings & 34.9% investment (of GDP in 2008-09) put India in league of world's fastest growing nations.

STAFF REPORTER 11:14 HRS IST
* Govt initiates steps to boost private investment in agri * Wants credit available at reasonable rates on time for private sector to invest in agriculture

* Slowdown in infrastructure that began in 2007, arrested

* Domestic oil production to rise 11 per cent in 2009-10

* Gas output up 52.8 per cent to 50.2 billion cubic meters with RIL starting production

* India world's 2nd largest wireless network with 525.1 million mobile users

* Virtually every second Indian has access to phone

* Auction for 3G spectrum to provide existing and foreign players to bring in new technology and innovations.

Source: PTI

Union Budget 2010....GOOD WISHES TO SHRI PRANAV MUKHERJEE AND OUR COUNTRYMEN...FOR UNION BUDGET.