Economic Survey of India 2011

The Economic survey of India 2011 tells that the Indian economy in the year 2010-11 has showed a healthy growth and a stable fiscal consolidation.

Economic Survey of India 2011

The global financial crisis of 2007-09 had initially caused a sluggish growth. But a remarkable emergence in the Indian Economy has been observed even after the slowdown, happened due to the crisis.

The estimated growth of 8.6% has been witnessed (as per CSO report, 7 February 2011). The growth has been strong in the agricultural sector and in the manufacturing sector. Inflation on the other hand seems to be high but it has come down distinctly from the initial position i.e. the start of the fiscal year.

There were a few challenges faced during the survey – economic governance, efficiency of subsidies and infrastructure. There are policies which are made in order to tackle such problems.[1]

Highlights of the survey

There has been a growth of 9.7% of the GDP (at market price) in the investments and savings and the private consumption as witnessed by the survey. The rise in the savings rate and the rate of investment was up to 33.7% and 36.5% respectively in the year 2009-10.

According to the survey the growth in the agricultural sector in the initial 4 years of the 11th year plan (2007–12) was around 2.87%. In the year 2009-10 the production of the food grains hiked to 232.1 billion tons from 218.1 billion tons. This year i.e. 2010-11 the agricultural sector is expected to have a growth of 5.7% as the monsoon is expected to be comparatively good. The rise in food inflation and the growing need of agricultural product in the country has initiated to the need of a second green revolution.

The industrial growth rate is 8.6% of the GDP at market price where as the manufacturing sector has witnessed a growth of 9.1% in 2010-11. Certain sectors like the telecom, crude oil production, civil aviation have well achieved during the period of April–November where as there has been a low rate of growth in the cement and fertilizer production, power generation, railway and cargo sectors.[2]

The economic survey 2010-11 has seen that with the rising investment the role of infrastructure has been escalating. There has been a huge growth in the tele density increasing from 20.74% in the year 2004 to 143.95% in the year 2010 in urban areas and 1.57% in the year 2004 to 30.18% in the year 2010 in rural areas. This shows that the telecommunication sector is performing extremely well.[3]

As far as the service sector is concerned the survey have suggested for policies I order to promote certain services like tourism, accounting, education, financial, legal services.

The Forex Reserves is predicted to be US $ 297.3 bn. The survey states that in April- December 2010 the exports would go up by 29.5% and the imports would rise up by 19%.[4]

The survey also observed a rise in Net Banking which was estimated to be 59%. This shows that the Banking sector has been performing effectively. Social programme spending has been gone up by 5% of the GDP.

According to the survey the Gross Fiscal Deficit has gone down by 1.5%. That is 4.8% from 6.3%in the year before.[5][6]

Key Economic Indicators for 2010-11

DATA CATEGORIES AND COMPONENTS[7] UNITS 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
1. GDP AND RELATED INDICATORS
GDP(current market price) Rs Crore 3692485 4293672 4986426 5582623PE 6550271QE 7877947AE
Growth rate % 13.9 16.3 16.1 12.0 17.3 20.3
GDP (factor cost 2004-05 prices) Rs Crore 3254216 3566011 3898958 4162509PE 4493743QE 4879232AE
Growth rate % 9.5 9.6 9.3 6.8 8.0 8.6
Savings rate % of GDP 33.5 34.6 36.9 32.2 33.7 na
Capital formation (rate) %of GDP 34.7 35.7 38.1 34.5 36.5 na
Per Cap Net National Income (factor cost at current price) Rs 27123 31198 35820 40605 46492 54527
2. Production
Food grains Mn tonnes 208.6 217.3 230.8 234.5 219.1a 232.1b
Index of industrial production c (growth) % 8.0 11.9 8.7 3.2 10.5 na
Electricity Generation (growth) % 5.2 7.2 6.4 2.8 6.0 na
3. Prices
Inflation (WPI) (12 months avg) %change 4.3 6.5 4.8 8.0 3.6 9.4d
Inflation CPI (IW)(avg) % change 4.4 6.7 6.2 9.1 12.4 11.0d
4. External Sector
Export Growth (US $) % change 23.4 22.6 29.0 13.6 -3.5 29.5e
Import Growth (US $) % change 33.8 24.5 35.5 20.7 -5.0 19.0e
Current Account Balance (CAB)GDP % -1.2 -1.0 -1.3 -2.3 -2.8 na
Foreign exchange reserves US $ Bn 151.6 199.2 309.7 252.0 279.1 297.3f
Avg Exchange Rate Rs / US $ 44.27 45.25 40.26 45.99 47.42 45.68g
5. Money and Credit
Broad Money (M3)(annual) % change 16.9 21.7 21.4 19.3 16.8 16.5h
Scheduled commercial bank Credit (growth) % change 30.8 28.1 22.3 17.5 16.9 24.4h
6. Fiscal Indicators (centre)
Gross Fiscal Deficit % of GDP 4.0 3.8 2.5 6.0 6.3 4.8
Revenue Deficit % of GDP 2.5 1.9 1.1 4.5 5.1 3.5
Primary Deficit % of GDP 0.4 -0.2 -0.9 2.6 3.1 1.7
7. Population Million 1106 1122 1138 1154 1170 1186
(Year wise projected population as on 1st Oct) 2005 2006 2007 2008 2009 2010

Definition of key terms

AE: GDP figures for 2010-11 are advance estimates;

PE: Provisional Estimates;

QE: Quick Estimates;

na: Not available;

a: Final estimates;

b: second advance estimates;

c: The annual growth rates have been recompiled from 2005-06 onwards since the indices have been recompiled from April 4 onwards using new series of WPI for the IIP items reported in value terms

d: Avg April–December 2010

e: April–December 2010

f: as of December 31, 2010

g: Avg exchange rate for 2010-11 (April–December 2010)

h: Provisional

i: Fiscal indicators for 2009 are based on the provisional actuals for 2009-10

j: Indian Rupee 1 Crore = Indian Rupee 10 million = Approx. USD 218,914 (Conversion 1USD = Rs 45.68)[8]

Agriculture and food management

The growth of the agricultural sector plays an important part over the performance of the Indian economy.

After the quantum leap in agriculture due to 1960s Green Revolution, which also led to achievement of food security to a great extent, no such findings have been witnessed in India since then.

The rapid increasing demand for food security has established the demand for a second Green Revolution.

But it does not end there; further special attention to fruits, vegetables, pulses and oilseeds are a must to increase its production and productivity levels, for the reason that first Green Revolution did not pay any heed to the same.

There has been an increase in the entire cropping area by 2.33 lakh hectares[9] in the year 2010 as compared with the year 2009 in food grains, oilseeds, sugarcane and cotton. Whereas there is a decrease in the cropping area by 5.3 lakh hectors[10] of the rice growing areas of West Bengal, Bihar and Uttar Pradesh due to drought during 2010. The same has been the case with the cropping areas under coarse cereals which decreased by 3.42 lakh hectors,[11] but in the case of pulses the cropping area has gone up by 6.11 lakh hectors[12] in 2010 which seems to be quite good. The total area under food grains has decreased by 2.71 lakh hectors.[13] The cropping area for ground nuts has increased by 4 lakh hectares.[14] The overall area in oilseeds has decreased by 8.27 lakh in 2010.[15]

References

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