New Delhi: In an effort to adequately handle the challenges like slow economic growth rate, volatility in rupee, poor state of government’s treasury and pending economic reforms, the Finance Minister may table a growth-oriented budget on Friday. In the economic survey released on Thursday, the Finance Minster has already highlighted these problems. Challenges posed in economic survey are giving indication of an aggressive budget on Friday.

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The Economic survey of 2011-12 has presented the state of a troubled economy. Higher interest rates and high inflation figures are having a negative impact on the pace of the country’s economy growth. GDP growth rate in the current FY is estimated to be at 6.9 percent. In the next FY it has been predicted that it won’t go beyond 7.6 percent. With all these figures, the hopes of double digit growth rate appear quite distant.

Slow economic growth rate has badly hit the domestic savings in the current FY. It has dropped from 33.8 percent in 2009-10 to 32.3 percent in 2010-11. Domestic investment growth rate is also going through a rough phase. It has slipped from 36.6 percent to 35.1 percent in 2010-11.

The Finance Minister is expected to come up with the plans and proposals to deal with the economic slowdown. He is expected to come up with the policies to support savings and investments rates. To improve the state of the government’s treasury, he is expected to exercise options favouring revenue growth. For this purpose, he is expected to have a special focus on the the industrial growth. The Finance Minister is expected to strike balance between the two in the coming budget. 

Economic survey has emphasised that subsidy load may affect fiscal deficit. It is clear that in the current FY, fiscal deficit is going to cross 4.6 percent. It has been suggested in the Survey that for containing fiscal deficit, the Finance Ministry needs to have a fresh approach towards it.

Economic survey has emphasised on the need to promote investments in order to get the economy back on track. For this, survey has suggested to allow FDI in multi brand retail in a phased manner. As far as inflation is concerned, it has been estimated in the survey that by the month-end it is going to be around 6.5 to 7 percent.

(JPN/ Bureau)