GDP growth to exceed 8.7%, sweeping reforms likely: Eco Survey

New Delhi, Feb 28 (UNI) Hinting at an upward adjustment in the targeted growth rate of 8.7 per cent in 2007-08 and keeping prices under control, the Economic Survey today called for drastic reforms in various sectors including phasing out controls on sugar, fertilisers and drugs and private entry into coal mining.

The Survey also called for raising foreign equity in the insurance sector to 49 per cent and allowing 100 per cent FDI in greenfield private rural agricultural banks.

The Survey, 2007-08, tabled by Finance Minister P Chidambaram in Parliament, also suggests that public transport systems in metros and large cities must be run by organised private companies.

Heralding a pronounced entry for private domestic and foreign players in many critical sectors, the Survey also calls for completing the process of selling 5 to 10 per cent equity in previously identified profit-making 'non-Navratna' enterprises.

It notes that growth in 2006-07, initially estimated at 9.2 per cent in February 2007, was revised upwards to 9.4 per cent in May that year and further to 9.6 per cent in the quick estimates released by the CSO on January 31 this year.

This suggests that ''upward adjustments in 2007-08 are possible,'' it says.

The Survey expects robust inflows of FII and FDI investments and a check on prices by a prudent management of demand and supply of commodities.

On the controversial issue of Special Economic Zones, the government's report card for the year makes a case for checking the proliferation of SEZs.

It suggests listing of all unlisted Public Sector Enterprises and selling of minimum of ten per cent equity to the public, besides auctioning of loss-making PSEs that cannot be revived. For those in which the net worth is zero, negative bidding should be permitted in the form of debt write off.

It also pitches in favour of amending the Factories Act to increase work week to 60 hours from 48 hours at present and daily limit to 12 hours to meet seasonal demand through overtime.

In the oil sector, it suggests selling off of old fields to the private sector for application of improved and enhanced oil recovery techniques. The document says in the case of the Railways' Dedicated Freight Corridor, public sector rail track companies should be allowed to own new tracks and signals.

Besides, there should be free entry of private and public-private partnership (PPP) rail freight companies in the Indian Railways' flagship programme.

On the issue of FDI entry in the retail sector, which touched off huge protests, the Survey recommends a share for foreign equity in all retail trade. Further, 100 per cent foreign equity should be permitted in foreign branded specialised retail chains, such as luxury brands, consumer durables and semi-durables.

It also calls for allowing 51 per cent foreign equity in special category of insurance companies that provide all types of insurance, such as health and weather, to rural residents and for all agriculture-related activities, including agro processing.

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