Indian Economic survey 2006-2007 – Highlights

Economic Survey on Capital Markets:
* Expects “scale-up” in FII investment
*India to remain preferred portfolio destination
* Mop-up through public issues, pvt placement to gather pace
* Global economy to post impressive growth this year
* Measures needed to revive corporate debt market
* Commodity exchanges to remain vibrant
Economic Survey on Govt Finances:
* Exemptions to cost Rs 100,147 Cr in 2006-07
* Collections to over-shoot target
* No hint of stance on income tax rates
* Service tax is a promising source
* Customs duty collection rate 11% down from 14%
* Further tax reform needed
* VAT collections healthy
* No talk of GST
* Expenditure control not happening
Economic Survey on Inflation:
*Expects pressure on prices during this year
* Says short supply of staples, high global prices the reason
* Demand fed by high growth, foreign inflows, money supply, credit
* Impact of duty cuts, dear-money policies to be felt shortly
* But inflation will remain unless supply of staples improves
Economic Survey on Macros:
*Economy “decidedly taken off” to higher growth
*Challenge is to tame inflation without hurting growth And ensure that everybody is invited
*Inflation need not be the price for high growth
*Infrastructure is improving; attracting global money
*Merchandise imports do not suggest over-heating
*There should be no let-up in fiscal-deficit control
*Fiscal deficit should not be expanded to finance infrastructure
*Inclusive growth is not low growth
*Unemployment is increasing because growth is not high enough
*Global issues are a concern, but do not pose a risk

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