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Posted by S.mohamed Mohideen
(stmohideen) on 2/25/2010
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| Highlights of Economic Survey for 2009-10 GROWTH
* Indian economy seen growing 8.25-8.75% in 2010-11 * Econ expected to return to 9% growth in medium-term * India FY11 growth seen 100 bps more than FY10 * Medium-term prospects of econ growth "really strong" * India could be fastest growing econ in next 4 yrs * Expect GDP growth to breach 9% mark in 2011-12 * Risk of second-dip recession in advanced nations * India seems to be returning to pre-crisis growth rates * India medium-, long-term growth prospects excellent * No reason why India can't achieve double-digit growth INFLATION * Signs food, fuel inflation spreading to other items * Concern of higher than expected inflation in coming mo * Rapidly rising food inflation cause for concern * Poor rain prevented seasonal food price fall post Oct * Hype about kharif failure exacerbated WPI expectation ECON, FISC * Transmission of monetary policy remains sluggish * Higher government borrowing raised banks' SLR investments * Saving, investment rate good for medium-term growth * Savings rate expected to rise further * Govt should promote transparency in commodity futures * Impact of current subsidy system questionable BANKING * Growth in bank credit remained low in FY10 * Public sector banks better than private banks in credit growth * Growth in food credit low so far in FY10 * Need more transparency in micro-finance functioning * Computerisation of banking sector in completion stage * Rise in risk appetite increased capital flows in 2009 FINANCIAL INSTITUTIONS * Need to extend NPS to central, state autonomous bodies * Pension reforms made significant progress in India * Challenge to expand distribution network of NPS * Pension reforms to facilitate long-term savings * Interdependence of corporate, MFs raising concern MARKETS * Govt intervention in markets should be minimal * Govt shouldn't impose outright commodity futures ban * Equity market may show signs of recovery after Apr * Regulatory steps taken to make market sound, stable * Seen revival in secondary market following stimulus * Volumes in currency futures on BSE not significant * Trading volumes in interest rate futures low * Retail investor participation limited in corporate debt market * Retail investor participation limited in mutual funds FOOD PRICES * Food subsidy must be given directly to households * Food coupons must replace existing PDS system * Must identify poor for effective food coupon system * Possible to switch to food coupons system by 2012 AGRICULTURE * Agriculture sector continues to be cause of concern * Need policy initiatives to raise farm growth to 4% * FCI should be allowed to keep flexible buffer norms * Need to improve govt strategy for food releases * Govt shouldn't have any dealing with fertiliser companies * Fertiliser companies should be allowed pricing freedom * Provide fertiliser subsidy directly to farmers * Introduce coupon system to subsidise fertilisers MISCELLANEOUS * Unique identity system to come into effect in 2012 * Labour law reforms can improve labour demand Ervai Share & Investment Services
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