<p>The document, which assesses the state of the economy, warned that high food prices would rise further over next few months and criticised the food management policies that have led to "unacceptably" high prices of items like sugar. Food inflation is at present hovering close to 18 per cent.<br /><br />The pre-budget Survey (2009-10), presented by Finance Minister Pranab Mukherjee in Parliament, also recommended a "gradual rollback" of stimulus measures after assessing the impact on each sector.<br /><br />Projecting the economic growth to touch up to 8.75 per cent in 2010-11 and nine per cent in the next year, the Survey said: "It is entirely possible for India to move into the rarefied domain of double digit growth and even attempt to don the mantle" of the fastest growing economy in the world within the next four years.<br /><br />It, however, expressed concern over rising prices, saying that a major concern during 2009-10 was the emergence of high double digit food inflation. <br /><br />In a direct criticism of the government, particularly over the very high consumer price inflation, the Survey said that the "hype" over kharif crop failure without taking into account the comfortable food stocks and rabi prospects "may have exacerbated inflationary expectations encouraging hoarding and resulting in a higher inflation in food items.<br /><br />"... in the case of sugar, delay in the market release of imported raw sugar may have contributed to the overall uncertainty, thereby allowing prices to rise to unacceptably high levels in recent months," it added.<br /><br />The Survey said that "since December 2009, there have been signs of these high food prices, together with the gradual hardening of non-administered fuel product prices, getting transmitted to other non-food items, thus creating some concerns about higher than anticipated generalised inflation over the next few months."<br /><br />Referring to projection of 7.2 per cent growth of the economy in 2009-10, the Survey said, "The fast-paced recovery of the economy underscores the effectiveness of the policy response of the government in the wake of the financial crisis."<br /><br />The board-based recovery, it added, "Creates scope for a gradual rollback, in due course of some of the measures undertaken over the last 15 to 18 months, as part of the policy response to the global slowdown."<br /><br />These initiatives, it added, were also necessary for pushing the economy back on the growth path of 9 per cent, the rate at which the economy was expanding before the global crisis hit the world.<br /><br />Elaborating on prospects in the short and medium terms, the Survey observed that gross domestic savings stood at 32.5 per cent of GDP in 2008-09, while the gross domestic capital formation was 34.9 per cent.<br /><br />"The rates of savings and investment have reached levels that even ten years ago would have been dismissed as a pipedream for India. On this important dimension, India is now completely a part of the world's fastest growing economies."<br /><br />Indian economy has been one of the least affected by the global crisis. "In fact, India is one of the growth engines, along with China, in facilitating faster turnaround of the global economy. Risks, however, remain," it added.<br /><br />On the foreign trade front, which had taken a beating in 2009, is looking up with the prospects of recovery in the world output and trade volumes.<br /><br />The downside risks for world and Indian trade lie in the fact that though the fall has been arrested, both output and trade recoveries are still fragile given the fact that the recovery has been pumped up by the stimulus given by different countries, including India, the effects of which may dry up if natural recovery does not follow.<br /><br />The Survey, however, favoured more liberalised regime for foreign direct investment in the services sector like health insurance, rural banking and higher education. The policy change would include user friendly policy, rationalisation of taxes and streamlining of domestic regulations like licensing requirements and procedures.<br /><br />The government said the upcoming auction of radiowaves for the third generation mobile services will open the doors for foreign players to make an entry into fast growing Indian telecom market. <br /><br />"... This (launch of 3G technology) will provide existing operators a good opportunity as also foreign players to make an entry into the Indian market and bring in new technology and innovation."<br /><br />There is no cap on the number of service providers in each circle. For the 3G telephony, the government is planning to allow three to four private players in each circle depending upon the spectrum availability.<br /><br />The auction of 3G and Broadband Wireless Access (BWA) spectrum is scheduled to be held on April 9. The government had earlier indicated that interested foreign entities could take part in the auction directly.<br /><br />The Survey said that the introduction of BWA services will enhance the broadband penetration in the country. The broadband subscriber base stood at 7.98 million by the end of December 2009.<br /><br />Terming the growth of wireless mobile telephony in the country "spectacular", the Survey said the target of having 600 million subscribers by the end of 11th Five-Year Plan (2007-12) has been achieved before the end of 2012.<br /><br />Teledensity, an important indicator of telecom penetration, increased from 37 per cent in March 2009 to 47.9 per cent in December 2009.<br /><br />While the urban teledensity crossed 110.7 per cent the rural teledensity stood at only 21.2 per cent at the end of December 2009.<br /><br />The Survey proposed to achieve rural teledensity of 25 per cent by means of 200 million rural connections by the end of 11th Five-year Plan (2012).<br /><br />About telecom manufacturing, the Survey said that favourable factors such as facilitative policies, large talent pool in research and development and low labour cost can provide an impetus to the industry in the country.<br /><br />The production of telecom equipment in value terms increased from Rs 48,800 crore during 2008-09 to Rs 57,584 crore during 2009-10.<br /><br />The Survey said that the opening of the telecom sector has not only led to the rapid growth in the subscriber base but also helped a great deal towards maximisation of consumer benefits, particularly in terms of price discovery following a forbearance approach in tariffs. <br /><br />Survey Highlights<br /><br />Following are the highlights of Economic Survey 2009-10:<br /><br />* Economy likely to grow by up to 8.75 per cent in 2010-11<br />* Full recovery; return to 9 per cent growth in 2011-12<br />* Broad recovery gives scope for gradual stimulus roll back<br />* High double-digit food inflation in 2009-10 major concern<br />* Signs of food inflation spreading to other sectors<br />* Farm & allied sector production falls 0.2% in 2009-10<br />* Need serious policy initiatives for 4% agriculture growth<br />* Moots direct food subsidy via food coupons to households<br />* Favours making available food in open mkt<br />* Favours monthly ration coupons usable anywhere for poor<br />* Gross fiscal deficit pegged at 6.5 pc of GDP in 2009-10<br />* India 10th largest gold holding nation at 557.7 tonnes<br />* Exports in April-December 2009 down 20.3 per cent<br />* Imports in April-December 2009 down 23.6 per cent<br />* Trade gap narrowed to USD 76.24 bn in April-December.<br />* 32.5% savings & 34.9% investment (of GDP in 2008-09) put India in league of world's fastest growing nations. * Govt initiates steps to boost private investment in agri<br />* Wants credit available at reasonable rates on time for private sector to invest in agriculture<br />* Slowdown in infrastructure that began in 2007, arrested<br />* Domestic oil production to rise 11 per cent in 2009-10<br />* Gas output up 52.8 per cent to 50.2 billion cubic meters with RIL starting production<br />* India world's 2nd largest wireless network with 525.1 million mobile users<br />* Virtually every second Indian has access to phone<br />* Auction for 3G spectrum to provide existing and foreign players to bring in new technology and innovations.</p>
<p>The document, which assesses the state of the economy, warned that high food prices would rise further over next few months and criticised the food management policies that have led to "unacceptably" high prices of items like sugar. Food inflation is at present hovering close to 18 per cent.<br /><br />The pre-budget Survey (2009-10), presented by Finance Minister Pranab Mukherjee in Parliament, also recommended a "gradual rollback" of stimulus measures after assessing the impact on each sector.<br /><br />Projecting the economic growth to touch up to 8.75 per cent in 2010-11 and nine per cent in the next year, the Survey said: "It is entirely possible for India to move into the rarefied domain of double digit growth and even attempt to don the mantle" of the fastest growing economy in the world within the next four years.<br /><br />It, however, expressed concern over rising prices, saying that a major concern during 2009-10 was the emergence of high double digit food inflation. <br /><br />In a direct criticism of the government, particularly over the very high consumer price inflation, the Survey said that the "hype" over kharif crop failure without taking into account the comfortable food stocks and rabi prospects "may have exacerbated inflationary expectations encouraging hoarding and resulting in a higher inflation in food items.<br /><br />"... in the case of sugar, delay in the market release of imported raw sugar may have contributed to the overall uncertainty, thereby allowing prices to rise to unacceptably high levels in recent months," it added.<br /><br />The Survey said that "since December 2009, there have been signs of these high food prices, together with the gradual hardening of non-administered fuel product prices, getting transmitted to other non-food items, thus creating some concerns about higher than anticipated generalised inflation over the next few months."<br /><br />Referring to projection of 7.2 per cent growth of the economy in 2009-10, the Survey said, "The fast-paced recovery of the economy underscores the effectiveness of the policy response of the government in the wake of the financial crisis."<br /><br />The board-based recovery, it added, "Creates scope for a gradual rollback, in due course of some of the measures undertaken over the last 15 to 18 months, as part of the policy response to the global slowdown."<br /><br />These initiatives, it added, were also necessary for pushing the economy back on the growth path of 9 per cent, the rate at which the economy was expanding before the global crisis hit the world.<br /><br />Elaborating on prospects in the short and medium terms, the Survey observed that gross domestic savings stood at 32.5 per cent of GDP in 2008-09, while the gross domestic capital formation was 34.9 per cent.<br /><br />"The rates of savings and investment have reached levels that even ten years ago would have been dismissed as a pipedream for India. On this important dimension, India is now completely a part of the world's fastest growing economies."<br /><br />Indian economy has been one of the least affected by the global crisis. "In fact, India is one of the growth engines, along with China, in facilitating faster turnaround of the global economy. Risks, however, remain," it added.<br /><br />On the foreign trade front, which had taken a beating in 2009, is looking up with the prospects of recovery in the world output and trade volumes.<br /><br />The downside risks for world and Indian trade lie in the fact that though the fall has been arrested, both output and trade recoveries are still fragile given the fact that the recovery has been pumped up by the stimulus given by different countries, including India, the effects of which may dry up if natural recovery does not follow.<br /><br />The Survey, however, favoured more liberalised regime for foreign direct investment in the services sector like health insurance, rural banking and higher education. The policy change would include user friendly policy, rationalisation of taxes and streamlining of domestic regulations like licensing requirements and procedures.<br /><br />The government said the upcoming auction of radiowaves for the third generation mobile services will open the doors for foreign players to make an entry into fast growing Indian telecom market. <br /><br />"... This (launch of 3G technology) will provide existing operators a good opportunity as also foreign players to make an entry into the Indian market and bring in new technology and innovation."<br /><br />There is no cap on the number of service providers in each circle. For the 3G telephony, the government is planning to allow three to four private players in each circle depending upon the spectrum availability.<br /><br />The auction of 3G and Broadband Wireless Access (BWA) spectrum is scheduled to be held on April 9. The government had earlier indicated that interested foreign entities could take part in the auction directly.<br /><br />The Survey said that the introduction of BWA services will enhance the broadband penetration in the country. The broadband subscriber base stood at 7.98 million by the end of December 2009.<br /><br />Terming the growth of wireless mobile telephony in the country "spectacular", the Survey said the target of having 600 million subscribers by the end of 11th Five-Year Plan (2007-12) has been achieved before the end of 2012.<br /><br />Teledensity, an important indicator of telecom penetration, increased from 37 per cent in March 2009 to 47.9 per cent in December 2009.<br /><br />While the urban teledensity crossed 110.7 per cent the rural teledensity stood at only 21.2 per cent at the end of December 2009.<br /><br />The Survey proposed to achieve rural teledensity of 25 per cent by means of 200 million rural connections by the end of 11th Five-year Plan (2012).<br /><br />About telecom manufacturing, the Survey said that favourable factors such as facilitative policies, large talent pool in research and development and low labour cost can provide an impetus to the industry in the country.<br /><br />The production of telecom equipment in value terms increased from Rs 48,800 crore during 2008-09 to Rs 57,584 crore during 2009-10.<br /><br />The Survey said that the opening of the telecom sector has not only led to the rapid growth in the subscriber base but also helped a great deal towards maximisation of consumer benefits, particularly in terms of price discovery following a forbearance approach in tariffs. <br /><br />Survey Highlights<br /><br />Following are the highlights of Economic Survey 2009-10:<br /><br />* Economy likely to grow by up to 8.75 per cent in 2010-11<br />* Full recovery; return to 9 per cent growth in 2011-12<br />* Broad recovery gives scope for gradual stimulus roll back<br />* High double-digit food inflation in 2009-10 major concern<br />* Signs of food inflation spreading to other sectors<br />* Farm & allied sector production falls 0.2% in 2009-10<br />* Need serious policy initiatives for 4% agriculture growth<br />* Moots direct food subsidy via food coupons to households<br />* Favours making available food in open mkt<br />* Favours monthly ration coupons usable anywhere for poor<br />* Gross fiscal deficit pegged at 6.5 pc of GDP in 2009-10<br />* India 10th largest gold holding nation at 557.7 tonnes<br />* Exports in April-December 2009 down 20.3 per cent<br />* Imports in April-December 2009 down 23.6 per cent<br />* Trade gap narrowed to USD 76.24 bn in April-December.<br />* 32.5% savings & 34.9% investment (of GDP in 2008-09) put India in league of world's fastest growing nations. * Govt initiates steps to boost private investment in agri<br />* Wants credit available at reasonable rates on time for private sector to invest in agriculture<br />* Slowdown in infrastructure that began in 2007, arrested<br />* Domestic oil production to rise 11 per cent in 2009-10<br />* Gas output up 52.8 per cent to 50.2 billion cubic meters with RIL starting production<br />* India world's 2nd largest wireless network with 525.1 million mobile users<br />* Virtually every second Indian has access to phone<br />* Auction for 3G spectrum to provide existing and foreign players to bring in new technology and innovations.</p>
