The Economic Survey 2006-07, tabled in the Parliament
today, may have painted a positive picture of the Indian
economy, but has not failed to point out the constraints
that hobble its growth.
investment scenario looks quite optimistic, it says, rising
as it is with growing domestic savings and FDI inflows.
However, the survey says, investment will have to be channelled
towards capacity additions, if industrial growth is to
be accelerated. In this regard it mentions that sustained
economic growth, fiscal consolidation and an enabling
policy environment will continue to provide incentives
for capacity additions, and a basis for its sustained
survey strikes a note of warning with regard to the expansion
of employment opportunities in the industrial sector,
particularly in the organised segment. According to the
survey, employment opportunities in the organized sector
will be enhanced mainly through the building up of the
skills reservoir in the country. This can occur if an
increased emphasis is laid on a wide variety of vocational
training, coupled with an increasing flexibility in labour
the years to come, says the survey, it will be a meaningful
progress on these fronts that will determine the growth
of employment in the organized sector.
survey also says that domestic reforms will have to be
deepened further if the current dynamism, evident in the
country''s exports, is to be sustained on a long-term basis.
It says that this will only be possible if constraints
like infrastructure bottlenecks, outdated/inflexible labour
laws, SSI reservations and high transaction costs are
reduced. In this regard the survey also calls for a calibrated
policy of phasing out export incentive schemes, along
with a lowering in basic custom duty.
turn, the survey says, exporters need to turn their attention
towards placing more emphasis on non-price factors, such
as product quality, brand image, packaging, delivery and
survey also recommends that export industries be opened
more aggressively than hitherto to foreign direct investment
(FDI). Such an
aggressive approach, it says, will not only increase the
rate of investment in the economy, but also infuse new
technologies and management practices in export oriented
industries, which could result in an increase in exports.