New Delhi: The Economic Survey, to be tabled in Parliament on Thursday, is likely to provide an assessment of the impact of the global financial meltdown on the Indian economy and outline the strategy to spur growth and contain the mounting fiscal deficit.
India’s economic growth slowed to 6.7% in 2008-09 after registering over 9% during the preceding three years.
The global financial crisis, especially after the collapse of America’s iconic investment banker Lehman Brothers in mid-September last year, badly hit economies around the world including India.
The country’s export growth turned negative in October and industrial output too fell during the course of the financial year 2008-09.
In order to arrest the impact of the global crisis, the government announced three stimulus packages, which pushed up the fiscal deficit to over 6% of GDP from 2.5% estimated earlier.
The Economic Survey, which is tabled by the finance minister before the presentation of the budget, provides the government’s assessment of the economy, outlines the problems facing the country and suggests measures for dealing with them.
The Economic Survey is also likely to underline the need for adopting a new fiscal responsibility legislation to re-start the process of reducing government deficit over medium-term.
In a bid to boost the economy, the government had to abandon the fiscal consolidation road map laid down in the Fiscal Responsibility and Budget Management Act.
Moreover, the Survey is expected to pitch for diluting government equity in state-owned companies.
President Pratibha Patil in her address to joint sitting of Parliament had said that government would come out with a road map for disinvestment.
She had further said the government would retain 51% equity in the state-owned companies, meaning that a maximum of 49% equity can be offered to the public as part of the disinvestment programme.
With regard to social sector programmes, the Survey is likely to take a view on the proposed National Food Security Act which seeks to provide 25 kg of rice or wheat per month at Rs3 per kg to all families living below poverty line (BPL).
Prior to general elections, the Congress in its manifesto had promised to come out food security scheme to provide subsidised foodgrains to below povertyline families.