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Sustaining growth, the biggest job for India
February 28, 2008
Pushing for reforms, the Economic Survey on Thursday said inflationary impact of foreign funds flow, a slowdown in the United States, an appreciating rupee and sluggish infrastructure sector were major challenges before economy that is projected to slow down to 8.7 per cent in 2007-08.
"The new challenge is to maintain growth at these levels, not to speak of raising it further to double-digit levels," stated the Survey.
Considered to be a report card of the government, outlined several concerns like impact of the US sub-prime crisis, loss of dynamism in agriculture, appreciating rupee eroding India's export competitiveness, deceleration in industrial growth and managing capital inflows.
The Survey also suggested a slew of reform measures that alone could help raise the growth to an ambitious double-digit level. "Raising growth to double-digits will require additional reforms." These include opening retail to foreign direct investment, hiking FDI in insurance to 49 per cent, allowing 100 per cent FDI in new private rural agricultural banks, selling up to 10 per cent equity of Navratna (cash-rich) public sector units.
Image: Highrises dot the skyline of Mumbai, India's commercial capital.
Photograph: Jewella C Miranda
Also read: What's a recession? How will US slowdown hit India
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