Jsingh

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...