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Review of the Economy
2011/12
Economic Advisory Council to the
Prime Minister
New Delhi
February 2012
Option -A
REVIEW OF THE ECONOMY
2011/12
ECONOMIC ADVISORY COUNCIL TO THE
PRIME MINISTER
NEW DELHI
February 2012
ECONOMIC ADVISORY COUNCIL
TO THE PRIME MINISTER
Dr. C. Rangarajan
Chairman
Dr. Saumitra Chaudhuri
Member
Dr. M. Govinda Rao
Member
Dr. V. S. Vyas
Member
Dr. K. P. Krishnan
Secretary
i
Economic Advisory Council to the Prime Minister
E-Hall
Vigyan Bhawan
Maulana Azad Road
New Delhi
ii
CONTENTS
I. Growth Performance & Prospects
1-9
Review of Economic Outlook
1-4
Sectoral Developments
4-5
External Payments
5-7
Inflation and Monetary Policy
7-8
Prospects for 2012-13
8-9
II. International Economic Conditions
10-12
III. Structural Factors
13-16
IV. Sectoral : Farm, Industry and Services
17-21
Agriculture and Allied Sectors
17-19
Industry and Services
19-21
V. External Sector
22-27
VI. Prices
28-29
VII. Government Finances
30-36
iii
I. GROWTH PERFORMANCE AND PROSPECTS
Review of Economic Outlook
1. In July 2011 the Council had released its Economic Outlook taking the view that
the Indian economy would grow by 8.2 per cent in 2011/12. This was lower than
the provisional estimate of 8.5 per cent growth for the previous year (2010/11)
and only marginally more than that in 2009/10 (8.0 per cent). The view took on
board the early signs of a clear slowing down in the pace of investment and hence
in the pace of economic growth, that had begun to show up in the second half of
2010/11. However, in the course of preparations of the Economic Outlook during
June–July 2011, the Council had expected that it would be possible to visualize a
modest revival in the investment climate and hence in the investment rate and in the
pace of economic growth later in the year.
2. However, that did not...