Economic Survey
Improvement in Fiscal situation is critical
New Delhi: A day before the Union Budget 2004-05, the Finance Ministry has hinted at hard fiscal measures and "bold actions" to consolidate the current "growth momentum." "The economy appears to be in a resilient mode in terms of growth, inflation and balance of payments" and there are "signs of improvement in the investment climate in recent months," the Ministry's Economic Survey for 2003-04 has said, referring to the 8.2 per cent growth in real gross domestic product (GDP) registered in the previous year.

The survey says that there is "reason to believe" that the inflation rate this fiscal would remain around 5 per cent, as projected by the Reserve Bank of India, subject to there being no uncertainties in the movement of global oil prices. The Survey has pointed out that the real challenge lies in "sustaining the growth momentum" and achieving an annual average growth of 7-8 per cent in the next five years. In fact, the 5.7 per cent 23-year average annual growth recorded by India is way below what economies in East Asia have achieved over longer periods, despite much worse "initial conditions." The critical component for sustained growth, benign inflation and low interest rates, according to the Survey, is improvement in the fiscal situation.

Overhaul of Tax exemptions
New Delhi: The Economic Survey for 2003-04 has called for an overhaul of the regime of exemptions and implementation of a transparent tax administration. The document has stressed the need to evolve innovative tax laws and procedures to augment tax revenues even as it made a case for the establishment of a rigorous penal and enforcement mechanism. The Survey has highlighted that the decline in tax-GDP ratio was "entirely on account of the decline in the ratio of indirect taxes to GDP". It pointed out that the indirect tax-GDP ratio witnessed a sharp decline from 7.9 per cent in 1990-91(when economic reforms began) to 5.3 per cent in 2002-03.

The Survey highlights the sharp decline in 'collection rates', especially when compared with 1990-91. The collection rate for all commodity groups has come down to 15 per cent (provisional) in 2002-03 from a level of 47 per cent recorded in 1990-91. A sharp decline in collection rates was noticed in the case of petroleum products, chemicals, paper and metal Even as the Survey highlighted the sharp decline in `collection rates', it has advocated that the move towards gradually reducing Customs duty rates and aligning them with that of ASEAN countries should continue, as it will help domestic industry.

More spending on Healthcare
New Delhi: The Economic Survey has reiterated the need for larger spending in healthcare services. In order to reduce imbalances, the focus areas of the Tenth Five Year Plan include reorganisation and restructuring of the existing healthcare infrastructure at primary, secondary and tertiary levels, besides proper utilisation of funds. The Pradhan Mantri Swasthya Suraksha Yojna (PMSSY), which proposes to develop six AIIMS-like institutes in backward States could also reduce these gaps, said the Survey. It has also stated that a major thrust will be given to mainstream the Indian Systems of Medicine and Homeopathy (ISM&H) with focus on improvement and upgradation of standards of education in ayurveda, yoga, unani, siddha and homeopathy, standardisation of drugs and quality and ensuring sustained availability of raw materials.
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