Economy to grow at 9% in 2011-12, inflation a concern: Survey

New Delhi, Feb 25 (PTI) Indian economy is poised to grow
by 9 per cent in 2011-12 despite risks of global events like
volatility in commodity prices, exacerbated by political
turmoil in the middle east, according to Economic Survey.
The Survey for 2010-11, tabled in Parliament by Finance
Minister Pranab Mukherjee, has pegged the economic growth at
8.6 per cent for the current fiscal, helped by broad based
rebound in agriculture and "continued momentum" in
manufacturing and private services.
Inflation, an area of concern which acts as a road block
for the growth, is expected to be 1.5 per cent higher than
projected earlier, it said. Food inflation, in particular, has
come as major challenge for the economy.
Prime Minister Manmohan Singh had said Thursday that
general inflation would come down to seven per cent by March
end from more than eight per cent now.
Days ahead of the general budget, the Survey indicated the
need for fiscal consolidation. "Food inflation, higher
commodity prices and volatility in global commodity markets
have been a cause of concern underscoring the need of fiscal
consolidation and stronger reserves," it said.
The Survey also stressed on an efficient taxation system
by the proposed new tax regime under Goods and Services Tax
(GST).
It also called for better convergence among government
schemes in order to avoid duplications and leakage and to
ensure that benefits reach the targeted groups.
"Private sector participation in social sectors, such as
health and education in the form of public-social-private
partnership, could be one of the possible alternatives...,"
the Survey said.
It added that the government should give priority in
developing rain-fed area besides effective marketing links for
better returns to the farmers.
The survey called for improvement in the Mahatma Gandhi
National Rural Employment Guarantee Scheme, such as shifting
to permanent asset building and infrastructure development
activities to reduce transaction costs, better monitoring and
extension of the scheme to urban areas