Economic Survey 2013 highlights: 'Downturn more or less over', now 'cut subsidies'
The government has sought to correct this through National Food Security Act though concerns have been expressed that this would lead to a higher subsidy outgo.
"However, it is a part of the challenge of prioritisation to provide for this basic need even as other items of expenditure are minimised," the Survey said.
The Survey said while India's recent slowdown is partially rooted in external causes, domestic causes are also important.
The strong post-financial-crisis stimulus led to stronger growth in 2009-10 and 2010-11. However, the boost to consumption, coupled with supply side constraints, led to higher inflation. Monetary policy was tightened even as external headwinds to growth increased.
The consequent slowdown, especially in 2012-13, has been across the board, with no sector of the economy unaffected.
Falling savings without a commensurate fall in aggregate investment have led to a widening current account deficit.
Wholesale price indexed inflation (WPI) has been coming down in recent month. However, food inflation, after a brief slowdown, continues to be higher than overall inflation. Given the higher weightage to food in consumer price indices, CPI inflation has remained close to double digits.
Another consequence of slowdown has been lower than targeted tax and non-tax revenues. With the subsidies bill, particularly that of petroleum products, increasing, the danger that fiscal targets would be breached substantially became very
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