'Only positive aspect is the tax-GDP ratio'

ECONOMIC SURVEY 2005-06\ COMMENT: Nilotpal Basu

The Economic Survey for the year 2005-06 has not held out any significant surprises. The projected growth in agriculture is only 2.3 per cent. Into the 5th year of the Tenth Five-Year Plan, it can be safely stated that the overall growth target of 4 per cent in agriculture during the entire Plan period will remain elusive. Lack of growth in agriculture poses the gravest problem for a large number of people.

The situation in the agriculture sector obviously has a direct bearing on the situation of continued unemployment. The Survey has itself admitted this. This can be plainly because of the absence of regular employment for many workers.

The quality of life of the people was further threatened by the impact of inflation which particularly impacted consumption items, as the Survey points out "� "the upward trend in consumer prices was primarily on account of high price of vegetables and pulses".

The inflationary pressures were due to surges in international oil prices but the lack of adjustment of the taxation policies to blunt the impact of this was conspicuous by its absence.

A disconcerting feature, as revealed by the Survey, is "the embryonic deficit in current account. This is due to imports outstripping exports.

This reflected leakage of demand in the economy and also will have its own adverse employment effect for the economy. Finally, the situation in the social sector remains grim.

One major redeeming feature of the Survey is the growth in the tax-GDP ratio which implies the possibility of greater resources being available to the government in critical areas. The growth momentum in this year has to be sustained and multiplied.

Overall, the big euphoria built around the 10k-plus growth in the Sensex or the levels of corporate profits does not bring out the reality of the life of people who have voted for a paradigm shift to help growth benefit the "aam aadmi".