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Economic Survey 1999-2000
Economic Survey projects 5.9% growth for 1999-2000
In order to properly manage the deficit, the survey said "hard decisions" would have to be taken to downsize government, reduce subsidies and step up the privatisation of state-run industry.
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Broad-based industrial recovery a good sign
The high economic growth, low inflation, bullish stock market, bouyant exports, stable exchange rates and a record level of foreign exchange reserves are the 'feel-good' factors.
ES underlines need to look beyond knowledge-based industries
Over the next 15 months, removal of remaining controls on agricultural exports should accompany the removal of import controls already announced so that farmers can benefit from integration with world markets, the survey notes.
Outlook for stockmarket bright
Cut in long-term capital gains tax from 20 per cent to 10 per cent for resident Indians, exemption from income-tax all income of investors from mutual funds, and signs of overall economic improvement boosted the stockmarket sentiment.
Reduce infrastructure sector's dependence on govt funds: survey
The performance of most of the infrastructure and core industries has improved during 1999-2000, with electricity generation, petroleum products, transport
and telecommunication ''doing well''.
Foodgrain shortfall cause for concern
The survey advocated creaton of a single national market,
removing all inter-state movement restriction for farm products by
the state governments and phasing out of export restrictions to help
the farmers.
Oil import payments shoot up in H1
The rise in oil prices has also led to a substantial increase in
the oil pool account deficit, in spite of the increase in diesel prices
announced in October 1999.
Modest divestment proceeds, tax collections flayed
The fiscal situation has come under ''tremendous strain'' arising out of certain post-budgetary expenditure commitments. There has been a larger outgo on account of defence and pension payments.
Poverty, education, employment levels: moderate
The number of poor people in India has remained more or less stable around 320 million despite a good decline in the percentage of people below the poverty line.
WTO commitments stay, domestic sector to be protected.
India will reduce tariffs to the bound levels by the end of March 2000 in respect of
non-agricultural and non-textile items.
Reactions: Weak capital formation rattles industry bodies
The government should take tough decisions and overhaul the subsidies system.
The Fiscal Responsibility Act should be enacted and zero-based budgeting adopted, CII president Rahul Bajaj said.
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