India: Economic Survey Projects 8.1% Y/Y Growth In 2005-06

The pre-budget Economic Survey called for speeding up the tax and labor reforms and removing infrastructure bottlenecks for sustaining high GDP growth. The survey also pointed out downside risks to the economic growth such as inflation, hardening interest rates and fiscal deficit. The 2005-2006 Survey said that the industry should be divested from high taxes and distortive exemptions and supports imposition of user charges and cutting unwanted subsidies. The survey projected GDP growth of 8.1% during fiscal 2005-2006 on the back of new industrial resurgence, high investment and modest inflation. The survey also pointed out that power shortages were a major hurdle to higher GDP growth. The Economic Survey also estimates 2.3% farm sector growth for 2005-2006.