Economic Survey 2013 highlights: 'Downturn more or less over', now 'cut subsidies'

Feb 27 2013, 14:36 IST
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Finance Minister Palaniappan Chidambaram holds the economic survey 2012-13 report at the parliament in New Delhi February 27, 2013. (Reuters) Finance Minister Palaniappan Chidambaram holds the economic survey 2012-13 report at the parliament in New Delhi February 27, 2013. (Reuters)
SummaryEconomic Survey wants people to pay for all goods, services used - an end to subsidies.

technology and marketing of agriculture produce

*Survey calls for widening of tax base and prioritising expenditure to bridge fiscal deficit

*Calls for curbing gold imports to contain current account deficit

*Aadhaar-based direct cash transfer scheme can help plug leakages in subsidies

*With subsidies bill increasing, danger of missing fiscal targets is real in FY13

*Survey pitches for hike in prices of diesel and LPG to cut subsidy burden.

*Foreign Exchange reserves remains steady at USD 295.6 billion at December, 2012-end

*At present, overall energy deficit is about 8.6 pc and peak shortage of power is about 9 pc.

*Infrastructure bottlenecks affecting industrial sector performance

*Prospects for world trade as well as of India are still uncertain.

*Pitches for further opening of sectors for FDI

Following are highlights of the report:

(Reuters) Finance ministry delivered a the Raghuram Rajan-led Economic Survey 2013 report on the state of the economy on Wednesday, a day before FM P. Chidambaram unveils what is expected to be the most austere federal budget in years and recommended that diesel and LPG prices be hiked.

The annual report was prepared by Raghuram Rajan, the former chief economist to the International Monetary Fund (IMF) who became the top adviser in the finance ministry last year.

GROWTH

* India's GDP growth seen around 5 pct in 2012/13

* India's GDP growth seen at 6.1-6.7 pct in 2013/14

FISCAL DEFICIT

* India likely to meet fiscal deficit target of 5.3 pct of GDP in 2012/13, despite "significant" shortfall in revenues

* India government target for fiscal deficit is 4.8 pct of GDP in 2013/14

* India government target for fiscal deficit is 3 pct of GDP in 2016/17

* Prioritisation of expenditure seen as key ingredient of credible medium-term fiscal consolidation plan

* Raising tax to GDP ratio to more than 11 pct seen as critical for sustaining fiscal consolidation

* Room for accommodative monetary policy with expected fiscal consolidation

INFLATION

* India's headline inflation may ease to 6.2-6.6 pct in March

CURRENT ACCOUNT DEFICIT

* Focus on curbing imports, making oil prices more market determined to reign in current account deficit

* Recommends curbing gold imports to reign in current account deficit

* Room to increase exports in the short run limited

FOREIGN INFLOWS

* Foreign Institutional Investors (FIIs) flows need to be targeted towards long-term rupee instruments

SECTOR GROWTH

* India's industrial output seen growing around 3 pct in 2012/13

REPORT COMMENTS

* "Controlling the expenditure on subsidies will be crucial. The domestic prices of petroleum products, particularly diesel and liquefied petroleum gas (LPG) need to be raised in line with the prices

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