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Highlights of Economic Survey 2007-08

New Delhi, February 28, 2008

• Economy moves decisively to higher growth phase

• Economic growth in 2007-08 projected at 8.7 %

• Overall inflation projected to decline from 5.6 per cent in 2006-07 to 4.1 per cent in 2007-08

• Acceleration in domestic investment and savings rates.

• Buoyant growth in Government Revenues

• Investment climate full of optimism

• Concern over slowdown in consumer goods segment of industry and infrastructure constraints

• Indian economy at market exchange rate to cross 1 trillion dollars in current fiscal

• Growth in service sector continues to be broadbased with ‘transport and communication’ being the fastest during the Xth Five Year Plan

• 13.9 per cent growth in financial services in 2006-07

• Annual average growth of money on an accelerating  trend since 2003-04 reaching 19.5 per cent in 2006-07

• Considerable uncertainty in quantifying  the downside risk arising from the housing market and sub-prime mortgage market crisis in US

• 150 per cent increase in net foreign direct investment inflows in 2006-07 to US $ 23 billion. Trend continues in the current financial year with gross FDI inflows reaching US $ 11.2 billion in first six months

• Trade to GDP ratio increases from 22.5 per cent of GDP in 2000-01 to 34.8 per cent of GDP in 2006-07

• Heightened urgency to augment and upgrade infrastructure both physical as well as social and in particular power, roads and ports

• Persistent institutional weaknesses and implementation constrains at different levels of government need to be addressed

• Private sector requires policy and regulations that are comprehensive but simple and clear and credible

• Share of Central Government expenditure on social services, including rural development, in total expenditure (Plan & Non-Plan) increased from 10.97 per cent in 2001-02 to 16.42 per cent in 2007-08

• Agricultural growth, dependent as it is on monsoon, continues to fluctuate. Overall foodgrains production in 2007-08 expected to fall short of the target by 2.2 million tonnes.  Need for second green revolution particularly in rainfed areas emphasized.

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