Economic Review 2013-2014

Chief Economic Advisor Raghuram Rajan's first ever Economic Survey for the current fiscal was be tabled in Parliament today. According to the Survey, WPI inflation is seen declining to 6.2-6.6 percent by March, which could create more room for rate cuts going ahead. It pegs growth at 6.1 and 6.6 percent in FY14.

Below are highlights:

FY13 GDP Growth seen at 5%

Indian economy likely to grow at 6.1-6.7% in FY14

Growth downturn more or less over; economy looking up

WPI inflation may decline to 6.2-6.6% in March

Lower inflation to create more room for rate cuts

Inflation expectations seen anchored around current target

Food inflation mainly driven by cereal prices

Oil subsidy key fiscal risk; needs to be addressed

Need to up diesel, lpg prices in-line with global rates

Diesel price hike to put upward pressure on inflation widening trade, current account gap matters of concern

'Economic slowdown a wake-up call for stepping up reforms'

FY13 tax mop-up significantly lower than Budget aim

Room to increase exports limited in short-term

Need to curb gold imports to cut current account deficit

Need to stay on path of indicated fiscal consolidation

Medium-term fiscal consolidation plan 'credible'

Financial sector to be influenced by short-term/long-term factors

Fund flows to be influenced by risk perception of investors

Revival of investment in industry, infra key challenge

Overall global economic environment remains fragile

Industry growth still vulnerable to local, global factors

Government committed to fiscal consolidation

April-December data shows 5.3% fiscal gap aim 'achievable'

See significant shortfall in FY13 revenue target

Cushion for lowering trade deficit to be limited

Controlling subsidy expenditure remains crucial

Core inflation down on rbi action, fall in global prices

Future shift in RBI policy stance would be desirable

Concerns that food security bill may push up subsidy

Lower industrial growth due to sluggish investments

Impact of policy easing may not lead to inflation surge

Tax mop-up slippage can be lowered with additional efforts

Inflation expectation anchored around current inflation targets