Emphasising that in terms of growth the fiscal period 2003-2008 has perhaps been the best ever five-year performance in the history of independent India, the Economic Survey for 2007-08 warned about a number of challenges which need to be addressed if the current growth momentum has to be sustained in the coming years. The Economic Survey noted that the economy has moved decisively to a higher growth phase and the 8.7 per cent growth for the current fiscal is in keeping with the trend at market prices, exceeding 8 per cent every year since 2003-04. There was acceleration in domestic investment and savings rates driving growth and providing the resources for meeting the average 9 per cent growth target of the Eleventh Five-Year Plan. Macro-economic fundamentals continue to inspire confidence and the investment climate is full of optimism. Further, buoyant growth of government revenues made it possible to maintain fiscal consolidation. Inflation flared up in the last half of 2006-07 and was successfully contained during 2007-08 despite a global hardening of commodity prices and an upsurge in capital flows. Agricultural growth, dependent as it is on the monsoon, continued to fluctuate. The overall foodgrains production in 2007-08 is expected to fall short of the target by 2.2 million tones, though it is expected to be 10.1 million tonnes higher compared to the second estimates of 200607. While the production of kharif foodgrains is expected to be 5.3 million tones or 4.8 per cent higher than 2006-07, rabi production is expected to be lower by 3.3 million tones. Providing a critical analysis of the economy over the past one year, the Economic Survey underlined the need for additional reforms to raise the growth to double digit. The size of the country’s economy at market exchange rate will cross $1 trillon. With upward adjustments in the 2007-08 projections made possible, the GDP at current market prices is projected at Rs 46,93,602... [continues]
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