9% growth next fisc,unrest in M-E, inflation dampeners: Survey

Posted By: Pti
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New Delhi, Feb 25 (PTI) Inflation will remain a priorityfor the government which projected over 9 per cent economicgrowth in the next fiscal even as downside risks emerge fromrising oil prices due to turmoil in the Middle-East.

The Economic Survey 2010-11, tabled in the Lok Sabha byFinance Minister Pranab Mukherjee, said tight monetarypolicies would have to stay to curb inflation and mitigateglobal risks such as rising food and commodity prices and debtproblems in the European nations.

Ahead of the general Budget, the Survey made out a casefor gradual exit of stimulus provided to the industry tocombat the impact of the global financial crisis in 2008-09.

Insisting that the inflation is clearly the "dominant"concern, the Survey said "current growth and inflation trendwarrant persistence with an anti-inflationary monetarystance". Consolidation of fiscal deficit would also beessential to check the price rise, it added.

"Inflation is a matter of great concern, no doubt. Justone year ago in February 2010 food inflation was as high as20.2 per cent...though it is high but it has come down inJanuary...still it is an area of concern and we shall haveto work on it, particularly in the context of global economiccrisis," Mukherjee told reporters after tabling the Survey.

The Survey, considered a report card on the economy,listed rising international oil prices and sovereign debtproblems in the Euro zone and the political turmoil in theMiddle-East as the downside risks for the Indian economy.

Higher current account deficit due to impact of fragileglobal recovery on Indian exports and increasing domesticconsumption was listed as an area of concern.

"The problem may be further aggravated by the risinginternational oil prices," it added.

For the current fiscal, the Survey said, the economywould grow by 8.6 per cent, up from 8 per cent a year ago. "Itis expected that the growth will breach the 9 per cent mark in2011-12", reaching the pre-crisis levels.

The Survey also suggested a set of reforms, includingstreamlining of land acquisition and environmental clearancenorms, to expedite infrastructure projects, a crucial driverof growth.

Besides, it also pitched for opening of the ForeignDirect Investment (FDI) in multi-brand retail starting withmetro cities. "FDI in retail may help bring in technicalknowhow to set up efficient supply chains which could act asmodels of development," the Survey.

It also pressed for reforms in banking and insurancesector.

The Survey suggested private participation in socialsectors such as health and education in the form ofpublic-social-private-partnership to supplement the governmentefforts. .

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