Economic Survey: Highlights

• Economy slows down to 8.7% in 2007-08
• Inflation projected at 4.4 pc in 2007-08
• 3 manufacturing sector to grow at 9.4 pc in current financial year, lower from 12 pc in 2006-07
• Lower agriculture growth at 2.6 pc in 2007-08 from 3.8 pc in 2006-07
• Government sets target of 9 pc GDP growth during 11th Five Year Plan (2007-2012)
• Maintaining 9% rate challenging
• Double-digit growth tougher still
• Deceleration this year was expected
• Fundamentals "inspire confidence"
• Investment climate "full of optimism"
• But labour force growing faster than employment growth
• Unemployment rate higher by 1pc in five years to 2005
• Subsidies to increase by Rs 6,550 cr over Budget Estimate
• Budget estimate for subsidies was Rs 51,247 cr
• Glosses over off-Budget subsidies
• Inflation seen at 4.1 pc this year
• Inflation lower than 5.6 pc last year
• Inflation mainly led by primary non-food items
• Fuel and power group prime contributors to inflation

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• Investment goods inflation declines to 4.3 pc
• Positive for investment
• Farm growth seen at 2.6%, against 3.8% a year ago
• Foodgrain output seen at 219.3 MT against 217.3 MT in FY'07
• Acceleration in domestic investment, savings drove growth
• Macroeconomic fundamentals continue to inspire confidence
• Industrial growth slower at 9 pc in first 9 months of FY'08
• Costly rupee, sluggish consumer goods and infra a concern
• Rupee rose by 8.9 pc against USD during current fiscal
• Average credit growth slowed to 26.8% in FY'07, down in '08
• Forex reserves up by $91.6 bn to $290.8 bn on Feb 8, 2008
• GDP projected at Rs 46,93,602 cr (mkt price) in 2007-08
• Inflation reined despite higher commodity prices & surge in capital inflows
• Cumulative increase in non-food credit by Jan 4, 2008 was 11.8 pc as against 17.5 pc a year ago
• Capital inflows rise to 7.7 pc of GDP in first half of FY'08 as against 5.1% in FY'07
• FDI inflows reach $11.2 bn, outward investments surge to $7.3 bn in April-September
• Exports reach $111 bn in first 9 months of FY'08; imports grow 25.9 pc
• Surge in capital inflows, including FDI, to continue in medium term

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• Complete the process of selling 5-10% equity in previously identified profit making non-navratna PSUs
• Phase out control on sugar, fertiliser, drugs
• Sell old oil fields to private sector
• Allow a share for foreign equity in all retail trade
• Raise foreign equity in insurance to 49 pc
• Allow 100 pc FDI in greenfield private agri-banks
• State Electricity Regulatory Commissions should notify rational, credible, cross subsidy to make open-access viable
• Increase work week to 60 hours from 48 hours and daily limit to 12 hours
• Introduce new bankruptcy law that facilitates exit of old/ failed management as expeditiously as possible
• Public sector Rail Track company to own new tracks and signals
• Situation of excess inflows is likely to remain, though the pressure on reserve accumulation and exchange rate appreciation is likely to ease
• Urgent need to place the highest priority on building roads
• Urban land ceiling laws and limitations of rent control acts needs to be urgently addressed

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• Irrigation a major constraint on raising crop productivity
• Urgent need for a regime that supports predictable user charges, a financial system that allocates risk efficiently, and project selection based on sound commercial and legal principles to ensure transparency
• Import dependence to meet energy needs should be reduced by tapping coal reserves, accelerating exploration of oil and gas and fully exploiting the nuclear and hydro potential for power generation