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| Economic Survey predicts early revival of economy | | | Agencies
New Delhi, July 02: Finance Minister Pranab Mukherjee tabled the Economic Survey 2008-09 in Parliament on Thursday. The survey, a report card of the govt’s performance over the past year, saw an early revival of the Indian economy and said the worst of the recession was over.
The survey also set a disinvestment target of Rs 25000 cr, and called for allowing Foreign Direct Investment of upto 49% in key sectors like insurance and defence.
The Survey has asked for raising limit on foreign equity to 100% in specialised segments like health and weather insurance.
"Raise foreign equity share in insurance to 49 per cent. In addition, consider allowing 100 per cent foreign equity in a special category of insurance companies that provide all types of insurance (e.g. health, weather) to rural residents and for all agriculture-related activities including ago-processing," said the Survey, tabled in Parliament.
This may help dispel fears of foreign equity in insurance, it said.
The survey touched upon the major themes of the UPA govt’s economic vision, speedy and sweeping reforms in insurance, defence production, healthcare, and social sector schemes.
The survey indicated concern over the climbing rate of unemployment, and urged urgent investment in infrastructure.
The survey also indicated that a strict fiscal policy that limit deficit to 3% was necessary, especially after the stimulus measures undertaken by the govt earlier. But analysts still feel that the next budget may see an expansion of the deficit.
Though the Survey indicated that reforms, that had stalled due to political constraints during UPA’s last term would again pick up pace, analysts said any actual reforms would likely be gradual and the report should be treated as a signal of intent.
"It is wrong to assume everything will be announced in the budget. It is the strategic intent, a clear roadmap. The market should take it positively," said Amitabh Chakraborty, president for equities at Religare Securities in Mumbai.
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