Eco Survey predicts higher growth for next year

Says lower interest rates could provide an additional fillip to investment activity

The pre-Budget Economic Survey for 2012-13, tabled in Parliament today, has projected a turnaround in the economy in 2013-14, with growth expected to be in the range of 6.1 to 6.7 per cent, up from the advance estimates of five per cent growth in the current financial year. The improved growth number, however, would be subject to a normal monsoon, further moderation in inflation, which should induce further relaxation of the tight monetary stance, and a mild recovery of global growth.

Painting an improved scenario for the future, the Survey notes that the current environment is difficult, but the "future holds promise, provided we can answer the question that is formest in the minds of India's young poplation: Where will my job come from?" The Survey notes that the current pace and quality of job creation in India is not satisfactory and it is necessary to create better and high-productivity jobs to ensure the "best form of inclusion".

The Survey reiterates that India could not take the external environment for granted and has to move quickly to restore domestic balance through fiscal consolidation. The other policy imperatives, it notes, are lower inflation through demand compression and augmented agricultural production, giving the Reserve Bank of India the necessary flexibility to reduce interest rates. The Survey hopes that lower interest rates could provide an additional fillip to investment activity for the industry and services sectors, especially with the easing of regulatory, bureaucratic and financial impediments.

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Also See | Economic Survey 2013: Highlights