Midterm review of Indian Economy

The main highlights of the midterm review of our economy, presented to the Parliament, are

1. The GDP has grown at a rate of 9.1% during the first six months of current fiscal year
2. Manufacturing is resurgent with a growth rate of 10.90%
3. Services sector is going strong at a growth rate of 10.70%

4. Revenue collections buoyant. In the first half of the fiscal, the revenue collections stood at Rs. 1,29,986 Crores which was almost 40% of the budget estimates. Direct tax collections during April-November stood at Rs.1,00,315 crore as compared to Rs. 71,464 Crores, registering a growth of 40% over that of the same period of the last year. Indirect tax collections also did well during the first six months. While customs collections grew by 32.70%, service tax collections by 63.40%, excise duty clocked a growth of 7.40% in the period under review.

6. Inflation is under control. The wholesale prices-based annual inflation rate declined to 5.16 percent for the week ended December 2, 2006 from 5.30 percent and 5.45 percent in the two previous weeks.

7. Export Growth is at 37.30%

8. Foreign investment inflows are strong. Net capital inflows accelerated to $12.50 billion during April - June ’06 as compared to $7.7 billion during the corresponding period of the last year
No overheating of the economy.

However, there are some areas of concerns which needs to be addressed

1. Reforms in labour laws
2. Deregulation of mining
3. Steps to boost growth in agriculture sector which grew only by 2.6% in the first six months of this fiscal.

3. Setting up the additional power generation capacity.
4. Massive funds needed for infrastructure in the 11th Plan

I hope with right policy initiatives by Govt. of India, it is not far away for us to achieve a GDP growth rate of 10%.