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    Economic growth robust, inflation a worry

    New Delhi: The Indian economy is expected to grow at 8.75-9.25 per cent in financial year 2012 according to the Economic Survey for the year 2011-12 announced on Friday.

    Robust growth and steady fiscal consolidation have been the hallmark of the Indian economy in the year 2010-11 so far. The growth rate has been 8.6 per cent in 2010-11 and is expected to be around 9 per cent in the next fiscal year.

    The growth has been broad-based with a rebound in the agriculture sector which is expected to grow around 5.4 per cent. Manufacturing and services sector have registered impressive gains. Savings and investment are looking up while exports are rising. However, food inflation, higher commodity prices and volatility in global commodity markets have been a cause of concern underscoring the need of fiscal consolidation and stronger reserves.

    Below are the highlights:

    On Growth:

    Indian economy to grow 8.75-9.25 per cent in FY12
    Expect Indian economy to top 9 per cent growth rate FY12
    Maintaining growth with price stability key challenge
    Seeing fast, strong turnaround in Indian economy
    India growth likely to revert to pre-crisis level FY12
    Expect India's economic growth to pick up medium-term
    Probability of second-dip recession very low
    FY11 GDP growth relatively broad-based
    Monsoon, crude prices pose risk to econ growth

    On Inflation:

    Inflation is clearly a dominant concern
    Inflation may stay elevated on West Asia crisis
    Food price, demand pressure to drive inflation outlook
    Inflation largely driven by food items
    High food inflation "dark cloud" on Indian economy
    High food prices driven by demand factors
    Inflation pressure seen exacerbated by global prices
    Rising purchasing power aiding spurt in food prices
    Economic recovery triggered demand-side pressure in economy
    Inflation pressures from both domestic, global factors
    Core inflation suggests inflation now generalised
    Need to prevent inflation slipping into core sector
    Food inflation stubbornly in double-digits
    Inflation likely to moderate on fiscal, monetary steps
    Committed to provide cooking fuel at affordable price
    Plan to increase diesel prices in staggered manner
    Government to cap auto fuel prices if crude oil spurts
    April-December average inflation of 9.4 per cent highest in 10 years
    High food inflation not unique to India
    Inflation significantly above RBI's comfort level
    Need to be vigilant against demand-side pressures
    Grain release in batches, not bulk, to tame inflation

    On Fiscal Front:

    Centre's fiscal broadly on consolidation track April-December
    India FY11 fiscal gap seen 4.8 per cent on higher GDP base
    India FY11 revenue gap seen 3.8 per cent of GDP
    Current account gap likely to moderate on export spurt
    Need to lower fiscal deficit
    Liquidity crunch mainly due to large government cash balance
    Need more proactive fiscal steps to eradicate poverty
    Favours smart cards also for kerosene, fertiliser subsidy
    Buoyant tax revenue key driver of fiscal consolidation
    Rise in corporate, service tax mop-up noteworthy
    Prospects of revenue-led fiscal consolidation bright
    Better subsidy targeting improving fiscal management
    Direct Taxes Code proposed to be launched April 2012
    Tax buoyancy, 3G auction brightened FY11 fiscal health
    States likely to be back on fiscal consolidation FY12
    States' consensus on GST yet to be achieved
    Deepening reforms key to sustain fiscal consolidation

    On Monetary Front:

    Need persistent anti-inflation monetary stance
    Government implementing gradual exit from stimulus
    Liquidity management major challenge for RBI
    Excessive cash crunch makes credit delivery difficult
    Need G20 co-operation to manage forex flow volatility
    RBI forex market intervention unlikely to be inflationary
    Don't want total reliance on import to beat shortages

    On Banking, Financial Institutions:

    Minimum capital requirement for banks should be graded
    Two types of banking licences could be considered
    May mull separate licence for basic, full banking services

    On Industry:

    Deceleration in industrial output cause for concern
    Slowdown in industrial growth seen temporary
    Medium-term industrial growth prospect seen positive
    Plan to increase diesel prices in staggered manner
    Government to cap auto fuel prices if crude oil spurts
    Committed to provide cooking fuel at affordable price
    Need to keep all options open if forex flows hurt economy

    On Food Prices:

    Food price, demand pressure to drive inflation outlook
    Maintaining growth with price stability key challenge
    High food prices driven by demand factors
    Higher FY11 farm growth to help ease food prices
    Rising purchasing power aiding spurt in food prices

    On Agriculture:

    Need to review grain release, procurement policies
    Don't want total reliance on import to beat shortages
    Ample scope for improvement in grain release policy
    Grain release in batches, not bulk, to tame inflation
    Urgent need to expand storage space, facilities
    Need to plug PDS slippages to expand, improve coverage
    Smart card, coupons to help target food subsidy better
    Favours smart cards also for kerosene, fertiliser subsidy

    On Capital, Investment:

    Need to deepen capital markets
    "Sluggish" bureaucracy impeding FDI inflows

    On External Affairs:

    Economic uncertainty prevails in Europe, US
    Probability of second-dip recession very low
    Need to keep all options open if forex flows hurt econ
    Slowdown in FDI partly offset spurt in FII investment
    Need G20 co-operation to manage FX flow volatility
    RBI forex market intervention unlikely to be inflationary
    "Sluggish" bureaucracy impeding FDI inflows

    Miscellaneous:

    Direct Taxes Code proposed to be launched April 2012
    Tax buoyancy, 3G auction brightened FY11 fiscal health
    States likely to be back on fiscal consolidation FY12
    States' consensus on GST yet to be achieved

    Speaking about it, Siddhartha Sanyal, Chief India Economist, Barclays Capital told CNBC-TV18 said the survey was on expected lines. He expects fiscal deficit at 5.3 per cent of GDP in FY12. "Nominal GDP is expected to come in at 14.5-15 per cent for next fiscal," he said.