Economic Survey paints cautious, but optimistic economic outlook: Analysts

Banerjee further said there are poor signals on all fronts of the economy and it will be interesting to see how the Union Budget attempts to improve the situation.

Commenting on the Economic Survey, Standard Chartered bank Senior Economist Anubhuti Sahay said: "The survey has rightly stressed on the urgent need to restore the domestic macro-economic balances in place."

"The adverse impact of inflation is well reflected in lower savings rate, wider CAD and still elevated interest rates for investments," Sahay added.

Commenting on the Survey, India Ratings Chief Economist and Head of Public Finance Devendra Kumar Pant said, while the report reiterates slowdown, it also supplements the Government's commitment of minor slippage in fiscal deficit and that the way out is a credible fiscal consolidation plan which can help lead to macroeconomic and price stability.

According to the Survey, GDP growth will be 5 per cent this fiscal, the lowest in a decade, before improving to 6.1-6.7 per cent in FY14.

One reason for this low decadal growth, Pant said, is driven by the lowest growth in Government consumption since FY07 in the current fiscal at 4.1 per cent, which is evident form the large cash balance of the Government and this will help in tying fiscal deficit to 5.3 per cent of GDP.