Indian Economy Survey

For fiscal years 2010 and 2011, the Thirteen Finance Commission has made a number of recommendations specifically in connection to the India Economy Survey.  One of the first recommendations was for an exit strategy from the current expansionary position for 2008 to the beginning of 2010 to be calibrated.  Another recommendation seen in the India Economy Survey is that the country’s revenue deficit should be reduced and once the revenue surplus has emerged, the deficit eliminated no later than 2015.  Additionally, it has been recommended that the GDP have a new target o

For fiscal years 2010 and 2011, the Thirteen Finance Commission has made a number of recommendations specifically in connection to the India Economy Survey.  One of the first recommendations was for an exit strategy from the current expansionary position for 2008 to the beginning of 2010 to be calibrated.  Another recommendation seen in the India Economy Survey is that the country’s revenue deficit should be reduced and once the revenue surplus has emerged, the deficit eliminated no later than 2015.  Additionally, it has been recommended that the GDP have a new target of 68%, which would encompass debt for both the states and center, again by year-end 2015.

As a part of the India Economy Survey, it considers industrial growth and understands it has fallen behind because of obstacles specific to infrastructure, primarily in roadways and energy.  This survey also suggested that some of the sectors that are more labor intensive, such as paper leather products and foods, have not been able to recover well, as expected.  This survey also suggested that some of the sectors that are more labor intensive, such as paper leather products and foods, have not been able to recover well, as expected.  In this case, some budgetary incentives may be devised to assist.

In the India Economy Survey, officials also raised concern about capital inflows.  For this, caution was extended that inflows from the more well-developed countries would create a potential problem for India, possibly resulting in the economy becoming too hot.  To rectify this problem, foreign inflows into India would be curbed but for the service sector, officials realize by liberalizing Foreign Deposit Investment in higher education, rural banking, and health insurance the environment would be transformed to one that is to more conducive.

Regarding exportation of oriented industries, the India Economy Survey suggested more reduction in excise.  For this, peak duties for the merchandise sector would be lowered from 10% to 7.5% by adding in tariff reforms.  In addition, the excise of export oriented industries would benefit by reducing tariffs on all capital goods by setting the percentage at 3%.  Along with this, the India Economy Survey recommended that an additional reduction be applied to excise duties so the industry sector and exports would be in a more competitive position.

Finally, the India Economy Survey recommended that a slow, stimulus roll-back would aid in the economy recovering to the predicted 9% in growth.  By taking this measure, experts believe the fiscal deficit would be reduced.  On a final note, with India experiencing quick recovery from the financial crisis, it shows the economic policy created and implemented by the government has and will continue to be highly effective.  Even so, India’s government understands all the recommendations made will take time, estimated between 15 and 18 months minimum.