Economic Survey 2008-09 calls for Growth, Reform and Revival

New Delhi: Union Finance Minister Pranab Mukherjee presented the Economic Survey 2008-09, four days before the General Budget. The Economic Survey calls for more growth, reform and revival with a focus on investment and capital market. It paints a good picture of the Indian economy in the coming year. With the global recession receding and investment opportunities are opening up yet again, India is set to make its mark on the global arena.

While tabling the Economic Survey in Lok Sabha, Pranab Mukherjee expressed hope and confidence that India will surpass the 7 per cent GDP growth target. He also said that Monsoon would be normal this year despite the delay and there will be no impact on food production.

Here are the key areas on which the Economic Survey 2008-09 kept it focus -

Taxation:

In a major relief to the common people and taxpayers, the Economic Survey 2008-09 suggested tax cuts and increase in government expenditure. It said that the next round of stimulus package may include more tax cuts.

During the previous stimulus packages, the excise duty was cut by 6 per cent and service tax by 2 percent. The salaried employees and self-employed professionals may also witness an increase in income tax exemption limit for both men and women in addition to more relaxation under the Section 80 C and 80 D.

Capital Market:

"The capital market is showing signs of revival and confidence of both domestic and foreign institutional investors, will be restored", said the Economic Survey. The investments by FIIs in equity instruments amounted to USD 5.4 billion during April-May 2009.

The mutual fund investments in equity markets in March 2009 were Rs. 2,320 crore during April-May 2009.

Foreign Investment:

While the FDI limit in the insurance sector has gone up from 26 per cent to 49 per cent, the Survey wants 100 per cent FDI in insurance sectors related to health, weather and agriculture. It also wants 100 per cent FDI in high technology, strategic defence goods and services.

Debt & Bankruptcy:

The Economic Survey 2008-09 stressed on the need for a separate bankruptcy law for the country, separating from the existing Companies Act, 1956. A new bankruptcy law is needed to ensure speedy and effective bankruptcy, said the Survey. The existing bankruptcy provisions in India are very complex and it takes 8-10 years or more to complete the procedure of bankruptcy in the country.

The Economic Survey also calls for setting up an Independent Debt Office to manage the government debt.

Drug & Medicines:

The Economic Survey has called for decontrolling of drug prices. The drug price control should be limited to essential drugs where there are less than five producers, said the survey. The list of essential medicines will go to 354 from the existing 74.