Feb. 25, IIF, New Delhi : Prof. J.D. Agarwal, Professor of Finance and Chairman, Indian Institute of Finance has welcomed the Economic Survey released today by the government. According to Dr. Agarwal, Economic Survey clearly indicates an overall good performance of the government in almost every sector of economy except agriculture be it fiscal management, economic growth, social sector development despite the unfortunate national disaster of Tsunami and hardening international oil pricing in the year 2004-2005. A good growth rate of 6.9 %, inflation rate of 5 %, consolidated fiscal deficit of centre and states at 7.9% of GDP, significant improvement in savings and investments, revenue deficit at 2.5% of GDP, a export growth rate of 23 % and a robust industrial production at 8.4 % besides other positive indicators are a matter of satisfaction and clearly indicate the good performance of the government.

However, Dr. Agarwal feels, the fall in accretion of the foreign exchange reserves from 31 billion dollars to 15.9 billion dollars is a matter of concern particularly because India deserves to claim larger FDI investment given its economic fundamentals & need for massive investment in infrastructure and other sectors of economy to improve the global competitiveness of the economy. Decline in the growth in agriculture and service sector is also a matter of concern. According to him, decline in the growth sector is primarily because of increase in the service tax rate by 2 % last year and also the expansion of the scope of service tax. The Government needs to take necessary steps to allow a robust growth in the services sector, which has capability to generate instant employment and sustain growth in agriculture.

According to him, the government has rightly identified five core issues which deserve to be addressed as mentioned in the economic survey such as stepping up of investment in agriculture and ancillary activities, simplifying procedures and relaxing entry / exit barriers to give a boost to trade, enhancement of investment in infrastructure, resource mobilization and enabling public private participation in infrastructure sector.

The Economic Survey clearly indicates that India is on the threshold of entering into robust growth path in the next year feels Dr. Agarwal.