Annual Economic Survey 2010-11: India expects 9 per cent growth
The Indian economy will revert to the ‘pre-crisis’ growth level of 9 per cent in 2011-12.
NEW DEHLI:
The Indian economy will revert to the ‘pre-crisis’ growth level of 9 per cent in 2011-12, says India’s annual Economic Survey for 2010-11. The survey is a broad-brush look, not just at the economy but general financial conditions ahead of the annual statement of income and expenditure, the federal budget.
The survey, which was tabled in parliament on Friday, is optimistic about economic growth and fiscal consolidation. The threats to the economy come, paradoxically, from the weather, a ‘disproportionate spike in the price of crude petroleum’ and a slowdown of growth in developed industrial economies.
“Looking further, into the medium to long term, the expectation is that India’s pace of economic development will pick up even more,” says the survey. This optimism is based on the new ‘momentum’ in the savings and investment rates and India’s ‘demographic dividend’. However, repeating previous warning that India’s demographic dividend might turn into a demographic nightmare unless treated properly, the survey said, “Growth then depends much more on skill development and innovative activity.”
Given the current growth versus equity debate in India and the controversy surrounding runaway inflation, especially food inflation, the survey warns that unless there is global monetary easing, India will have to reconcile itself with a high cost, high inflation economy.
The revenue estimate for the fiscal deficit for 2010-11 has been placed at 4.8 per cent of GDP.
The survey believes that apart from high growth, the processes of financial inclusion and the increasing ‘monetisation of the economy’ may have increased the propensity to hold cash, thereby increasing the overall money supply held by the general public.
Published in The Express Tribune, February 26th, 2011.
The Indian economy will revert to the ‘pre-crisis’ growth level of 9 per cent in 2011-12, says India’s annual Economic Survey for 2010-11. The survey is a broad-brush look, not just at the economy but general financial conditions ahead of the annual statement of income and expenditure, the federal budget.
The survey, which was tabled in parliament on Friday, is optimistic about economic growth and fiscal consolidation. The threats to the economy come, paradoxically, from the weather, a ‘disproportionate spike in the price of crude petroleum’ and a slowdown of growth in developed industrial economies.
“Looking further, into the medium to long term, the expectation is that India’s pace of economic development will pick up even more,” says the survey. This optimism is based on the new ‘momentum’ in the savings and investment rates and India’s ‘demographic dividend’. However, repeating previous warning that India’s demographic dividend might turn into a demographic nightmare unless treated properly, the survey said, “Growth then depends much more on skill development and innovative activity.”
Given the current growth versus equity debate in India and the controversy surrounding runaway inflation, especially food inflation, the survey warns that unless there is global monetary easing, India will have to reconcile itself with a high cost, high inflation economy.
The revenue estimate for the fiscal deficit for 2010-11 has been placed at 4.8 per cent of GDP.
The survey believes that apart from high growth, the processes of financial inclusion and the increasing ‘monetisation of the economy’ may have increased the propensity to hold cash, thereby increasing the overall money supply held by the general public.
Published in The Express Tribune, February 26th, 2011.