ECONOMY SURVEY 2008-09

Economic Survey 2008-09

Highlights According to the pre-Budget Economic Survey 2008-09—a report on India's resilient economy—tabled in Parliament on July 2, 2009 by Finance Minister Pranab Mukherjee, India could grow upto 7.5 per cent in 2009-10 up from 6.7 per cent in 2008-09, provided the global economic slowdown bottomed out by September and the government was able to implement significant economic policy reforms. The Economic Survey estimates: GDP to grow to 7.5 per cent in 2009-10. Agriculture and rural demand continue to be strong and agriculture production prospects are normal. The production of food grains in 2008-09 to be 229.85 million tonnes as per the third advance estimates. The production of rice during 2008-09 to be 99.37 million tonnes and that of wheat 77.63 million tonnes. The estimates for rice production are 2.68 million tonnes higher than the final estimates for 2007-08. A rise in multi-brand retail foreign direct investment (FDI) cap. The main highlights of the survey are: The overall growth of GDP at factor cost at constant prices in 2008-09, as per revised estimates released by the Central Statistical Organisation (CSO) (May 29, 2009) was 6.7 per cent. Despite the slowdown in growth, investment remained relatively buoyant, growing at a rate higher than that of GDP. The Indian economy has shock absorbers that will facilitate early revival of growth. First, the banks are financially sound and well capitalized. The foreign exchange reserves position remains comfortable and the external debt position has been within the comfort zone. Per capita GDP growth, a proxy for per capita income, which broadly reflects the improvement in the income of the average person, grew by an estimated 4.6 per cent in 2008-09. The per capita income in 2008-09, measured in terms of gross domestic product at constant 1999-2000 market prices, was Rs. 31,278 (US$ 651.54). A sharp rise in Whole sale Price Index (WPI) inflation followed by an equally sharp fall, with the WPI inflation falling to unprecedented level of close to zero per cent by March 2009. The performance of six core industries comprising crude oil, petroleum refinery products, coal, electricity, cement and finished steel (carbon) grew at 2.7 per cent as compared to 5.9 per cent in 2007-08. The index of industrial production for the year 2008-09 points towards a sharp slowdown with growth being placed at 2.4 per cent.