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The Economic Survey 2008-09 Highlights

The Economic Survey 2008-09 presented to Parliament today by the Finance Minister Shri Pranab Mukherjee says, the speed at which the Indian economy returns to the high growth path in the short term depends on the revival of the economy, particularly the US economy and the Government’s capacity to push some critical policy reforms in the coming months.

The highlights of the Economic Survey 2008-09 is as follows:
· Economic growth decelerates to 6.7 per cent in 2008-09 compared to 9 per cent in 2007-08 and 9.7 per cent in 2006-07.

· Per capita growth at 4.6 per cent.

· Deceleration in growth spread across all sectors except mining and quarrying; agriculture growth falls from 4.9 per cent in 2007-08 to 1.6 per cent 2008-09.

· Manufacturing grows at 2.4 per cent, slowdown attributed to fall in exports and a decline in domestic demand.

· Global financial meltdown and economic recession in developed economics major factors in India’s economic slowdown.

· Investment remains relatively buoyant, ratio of fixed investment to GDP increased to 32.2 per cent in 2008-09 compared to 31.6 per cent in 2007-08.

· Fiscal deficit to GDP ratio stands at 6.2 per cent.

· Credit growth declines in the later part of 2008-09 reflecting slowdown of the economy in general and the industrial sector in particular.

· Increased plan expenditure, reduction in indirect taxes, sector specific measures for textile, housing, infrastructure through stimulus packages provides support to the real economy.

· Merchandise export grows at a modest 3.6 per cent in US Dollar terms while overall import growth pegged at 14.4 per cent.

· A large domestic market, resilient banking system and a policy of gradual liberalisation of capital account to help early mitigation of the adverse effect of global financial crisis and recession.

· Sharp dip in the growth of private consumption a major concern at this stage.

· Medium to long-term capital flows likely to be lower as long as the de-leveraging process continues in the US economy.

· Revisiting the agenda of pending economic reforms imperative to renew the growth momentum.

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