Union Finance Minister P. Chidambaram on 27 February presented the Economic Survey 2012-13 in the Lok Sabha of the Parliament. India’s Economic Survey for 2012-13 pegs the country’s growth at 6.1-6.7% and inflation at 6.2-6.6% for the next fiscal 2013-14 and made a strong call for cutting subsidies.
Economic Survey is presented every year, just before the Union Budget. It is a flagship annual document of the Ministry of Finance, Government of India. Economic Survey reviews the developments in the Indian economy over the previous 12 months. It summarizes the performance on major development programmes, and highlights the policy initiatives of the government and the prospects of the economy in the short to medium term.
The economic survey 2012-13 was prepared by a team of economists led by Chief Economic Advisor Raghuram Rajan, and pitches for speeding up economic reforms to activate a sluggish economy. It serves as an indicator of what is likely to be contained in the General Budget proposals.
Following are the major Higlhlights of the Economic Survey 2012-13
• GDP growth seen at 6.1-6.7 percent in 2013/14
• Government target for fiscal deficit is 4.8 pct of GDP in 2013/14
• Government target for fiscal deficit is 3 pct of GDP in 2016/17
• Headline WPI inflation may decline to 6.2-6.6 pct by March2013
• Focus on curbing imports, making oil prices more market determined to reign in current account deficit
• Foreign Institutional Investors (FIIs) flows need to be targeted towards long-term rupee instruments
• Prioritisation of expenditure seen as key ingredient of credible medium-term fiscal consolidation plan
• Raising tax to GDP ratio to more than 11 percent seen as critical for sustaining fiscal consolidation
• Room for accommodative monetary policy with expected fiscal consolidation
• India likely to meet fiscal deficit target of 5.3 pct of GDP in 2012/13, despite significant shortfall in revenues
• Recommends curbing gold imports to reign in current account deficit
• Room to increase exports in the short run limited
• Industrial output seen growing around 3 pct in 2012/13
• Govt priority to fight inflation by reducing fiscal impetus to demand as well as by focusing on incentivizing food production.
• More jobs in low productivity construction sector
• Balance of Payments under pressure with net exports decline
• Service sector has shown more resilience despite global slowdown
• Pitches for hike in price of diesel and LPG to cut subsidy burden
• Railway freight grows by 5.1 per cent in 2012-13
• Foreign Exchange reserves remains steady at USD 295.6 Billion at December 2012 end.