Economic Survey 2012

Economic Survey is the most sought after annual commentary, next only to the Union Budget, on the state of the Indian economy in the past fiscal year and prospects that deal in detail with overall macroeconomic performance of the country.

While the Union budget lays down road map for the economy for the upcoming fiscal, the Economic Survey analysis the progress data for the past fiscal in the light of projections and targets laid down in previous year’s Union budget.

The Economic Survey for 2011-12, tabled by finance minister Pranab Mukherjee, was no different – the survey report has estimated a growth of 6.9% for FY12, mainly due to weakening industrial growth.

For instance, India’s October IIP data registered a sharp de-growth of 5.1%, marred by steep interest rates and dismal growth in factory output. Prior to that, India’s September industrial output moved at a snail’s pace by recording subdued 2.5% growth. Similarly, India’s IIP growth tumbled to 1.82% during December.

However, the Economic Survey has also projected a 7.6% GDP growth for the next fiscal beginning April 1 and 8.6% in 2013-14, with agriculture and services sector continuing to perform well. Interestingly, the weightage of services sector as a share in GDP has climbed from 58% in FY11 to 59% in FY12.

On the other hand, the nation’s Agro sector growth forecast has been pegged at 2.5% in 2011-12 with food grains production likely to cross 250.42 million tons. Besides, FM Pranab Mukherjee has projected the industrial sector growth at 4-5% in FY12, much lower than the average of annual growth rates notched recently.

Highlights of the Economic Survey 2012:

• Indian Economy estimated to grow by 6.9% in 2011-12.
• FY13 and FY14 growth estimates pegged at 7.6% and 8.6% respectively.
• Agriculture growth projected at 2.5% in 2011-12.
• Industrial growth pegged at 4-5% in FY12.
• Inflationary pressures fade by the year end as food prices fall.
• WPI food inflation slumps from 20.2% in Feb’10 to 1.6% in Jan 12.
• Fiscal consolidation could spur Savings and Capital formation.