Survey: Gradual upswing ahead, 7.6% rise in GDP
Sounding an optimistic note, the Economic Survey 2011-12 said weakness in Indian economic activity has bottomed out and “a gradual upswing is imminent”. It admitted, though, that deceleration in 2011-12 was a “wake-up call”, and the country’s ability to deal with the current slowdown after 2008-09 was “weak”.
The survey warned policymakers not to “fall into the trap of complacency” and to think of ways “to pull India back to where it was — among the world’s three or four fastest growing economies”. Referring to proposals like opening of multi-brand retail to FDI, decontrol of diesel prices and tax reforms, some of which is difficult in the current political scenario, it suggested it might be better at times to step back and re-evaluate old and new policies.
The pre-Budget survey, tabled by finance minister Pranab Mukherjee in Parliament on Thursday, projected that India’s GDP will grow by an ambitious 7.6 per cent in 2012-13, and by 8.6 per cent in 2013-14. The key to an economic recovery, it said, lies in fiscal consolidation. In the current fiscal, GDP is projected to grow by only 6.9 per cent due to poor industrial growth and low investments.
It expects inflation will be around 6.5-7 per cent by the end of March, and moderate further later.
“The outlook for growth and price stability at this juncture looks more promising,” the survey notes. “There are signs that the weakness in economic activity has bottomed out and a gradual upswing is imminent.”
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