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The Economic Survey of India is
presented every year a few days before budget proposals are tabled in
Parliament. While the budget sets targets and roadmaps for the next one
year, the Economic Survey looks at the previous one year.
FOLLOWING are
the highlights of the Economic Survey 2000-01 tabled in the Indian
Parliament on February 23, 2001.
- Economic growth
to slow down to 6 per cent in 2000-01 from 6.4 per cent in 1999-2000
- Slowdown due to
poor showing of manufacturing, services and agriculture sectors
- Privatisation,
downsizing of government need of the hour
- Agriculture
growth likely at 0.9 per cent
- Industry slows
down to 5.7 per cent in April-December from 6.5 per cent in 1999-2000
period
- Services sector
growth expected to decline to 8.3 per cent this year as against 9.6 per
cent last year
- Growth rate of
six infrastructure industries of coal, power, telecom, roads, civil
aviation and ports down to 7.7 per cent in April-December 2000 from 9.1
per cent in corresponding period of 1999-2000
- Inflation shoots
up to 8.2 per cent by January 2001 from 6.5 per cent last year
- Fiscal deficit
likely at 5.1 per cent in 2000-01 compared to 5.5 per cent of 1999-2000
- In industry
sector, mining and quarrying have performed well in the current year.
Manufacturing has experienced reduction in growth
- Foodgrain
production to decline by 4.7 per cent due to uneven pattern of rainfall,
sporadic floods and droughts
- Poverty estimates
placed at 26.1 per cent and 23.3 per cent under two different estimates
- Gross domestic
savings improved marginally to 22.3 per cent in 1999-2000. Household
sector biggest contributor. While private corporate savings have been
stagnant, public sector savings remained negative.
- Direct tax
collection buoyant in 2000-01, indirect taxes experience shortfalls.
- Exports improve
by 26.4 per cent to $32,266 million in April-December 2000 against growth
of 16.6 per cent in 1999-2000
- Sharp increase in
POL imports, offset by decline in non-POL imports in April-December 2000,
leading to a marginally lower growth for imports at 14.3 per cent to
$38,150 million in April-December 2000
- Net foreign
investment at $1,766 million in April-September 2000
- Foreign exchange
reserves accumulated to $41.1 billion at the end of January 2001
- Current account
deficit expected to widen to 1.5-1.7 per cent of GDP in 2000-01 due to
higher import bill
- External debt to
GDP ratio declined to 20.7 per cent at the end of September 2000
- Money supply grew
by 15.8 per cent in the current year as against 13.9 per cent in 1999-2000
- Sustained high
fiscal deficit, both at the Central and state levels, key problem
affecting the economy
- Gross domestic
capital formation improves to 9.4 per cent in 1999-2000 from 2.3 per cent
in 1998-99 due to sharp rise in both public and private sector investment
- Growth in
electricity generated declines to 4.7 per cent in April-December 2000 at
372.6 billion kwh as against growth of 7.2 per cent last year
- Aggregate Central
government expenditure on social sector increases four-fold between
1992-93 to 2000-01
- External debt to
GDP ratio declined to 20.7 per cent at the end of September 2000
- Capital markets
were relatively subdued in 2000-01. Resource mobilisation through public
issues and rights were much lower than last year.
- Administered
interest rates on pension and provident fund remained invariant with
inflation leading to high real interest rates on government debt
- Government must
move out of production and concentrate on provision of public goods
- Subsidies need to
be reduced in number and better targeted
- Prices of
fertilisers and natural gas should have parity with international prices
- Management of
food economy requires comprehensive reforms
- Cenvat should be
further rationalised. Customs duty rates should be reduced to Asian levels
- Government
securities market has to be further deepened and broadened
- Introduction of
modern bankruptcy provisions, amendment of labour laws, repeal of land
ceiling laws at state level and review of SSI reservation are important
areas of reforms.
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