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| Economic Survey 2007-08 Highlights |
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- Economic Survey for the year 2007-08 was presented in the Parliament today.
- Economic growth slowed down to 8.7% in 2007-08 compared to 9.6% in 2006-07.
- Agricultural growth rate has decelerated to 2.6% in 2007-08 as compared to 3.8% in the previous year.
- Industry witnessed a slow down during April-December 2007 to 9% as compared to 11.2% in the corresponding period of the last year.
- During April-December 2007 manufacturing sector registered a growth of 9.6% (12.2% last year)
- Lower growth of consumer durables was a key factor in the slow down of manufacturing sector.
- Hotels, trade, transport and communications, financial services are the segments under Service sector which have done exceptionally well.
- Exports have suffered due to rupee appreciation and overall global slow down.
- The Survey recognizes the fact the economic growth is becoming more inclusive both in terms of employment generation and poverty reduction.
- Overall inflation is projected to decline to 4.1% in 2007-08 as compared to 5.6% in 2006-07.
- In 2006-07 Savings and investment rates expected to increase to 34.8% and 35.9% from their previous year levels of 34.3% and 35.5% respectively. This could help in sustaining 9% plus growth in future years.
- The survey sees considerable uncertainty in quantifying the down side risk arising from housing and sub-prime mortgage crisis in the US
- Addressing the issue of excess capital inflows into the economy, the Survey says that “the longer term solution to excess capital inflows lies in deepening productivity gains and addressing the root causes of the excess capital flows like interest differential and build-up of expectations on the rupee”
- For overall sustenance of the growth momentum the Survey recommends several policy initiatives. However, their implementation would depend on the political acceptability of these suggestions. Some of the recommendations are as follows:
- Amending Coal Mines Nationalization Act to allow regulated private entry into coal mining
- Divesting 5-10% equity in previously identified profit making non-Navaratna PSUs.
- Phasing-out control on sugar, fertilizer and drugs
- Sale of old oil fields to private sector
- Allowing a share for foreign equity in all retail trade.
- Permitting 100% foreign equity in foreign branded, specialized retail chains.
- Raising FDI limit in insurance sector to 49% from the current level of 26%.
- Allowing 100% FDI in green field private rural agricultural banks.
- Increasing the work week to 60 hours from 48 hours and daily limit to 12 hours to meet seasonal demand through overtime.
- Facilitating expeditious exit of old/failed management either by introducing a separate section on Bankruptcy in the Company Law or a new Bankruptcy Law by itself.
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Sensex
(03.09.10) |
18238.31 |
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(32.44) |
Nifty
(03.09.10) |
5479.4 |
| |
(-6.75) |
Dow Jones
(02.09.10) |
10320.1 |
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(50.63) |
Nikkei-225
(03.09.10) |
9062.84 |
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(135.82) |
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| WPI (July 2010) |
262.5 |
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(9.97) |
| M3growth (%y-o-y) |
14.7 |
| Repo-Rate (%) |
5.75 |
| Reverse-Repo(%) |
4.5 |
| CRR |
6 |
| Rs./U$ (03.09.10) |
46.67 |
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(0.11) |
| Foreign Exchange Reserves (as on 30.07.2010 US $ Bn.) |
284.2 |
| Brent (U$/bbl.) (03.09.10) |
73.87 |
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(-0.96) |
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| * |
Figures in bracket indicates change over previous value. In case of WPI it is y-o-y change. |
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