CNN-IBN reports:

Pushing for reforms, the Economic Survey on Thursday said inflationary impact of foreign funds flow, a slowdown in the US, an appreciating rupee and sluggish infrastructure sector were major challenges before economy that is projected to slow down to 8.7 per cent in 2007-08.”The new challenge is to maintain growth at these levels, not to speak of raising it further to double digit levels,” stated the Survey, a report card on the economy, presented in Parliament on Thursday.The Survey, tabled by Finance Minister P Chidambaram in the Lok Sabha, suggested a slew of reform measures that alone could help raise the growth to an ambitious double-digit level

So what measures did the Survey suggest ?

These include opening retail to FDI, hiking FDI in insurance to 49 per cent, allowing 100 per cent FDI in new private rural agricultural banks, selling up to 10 per cent equity of Navratna (cash-rich) PSUs.

The full survey details can be found here. Offstumped did a quick scan to glean some interesting tid-bits that didnt make the headlines.

For example Chapter 17 on the State of the Economy had this to say on Inclusive Growth

The 61st Round of NSSO Survey found that 47 million work opportunities were created during 1999-2000 to 2004-05, at an annual average of 9.4 million

India Shining anyone ? Not convinced there is more 

Employment growth accelerated to 2.6 per cent during this period.

So why did the NDA do so badly and get pilloried ? Well it was for positive reasons that we did not quite fathom at that time.

The labour force, however, grew at 2.8 per cent per year, 0.2 per cent point faster than the workforce, resulting in an increase in the unemployment rate to 8.3 percent in 2004-05 from 7.3 per cent in 1999-2000.

We just brought more people into the economy and were just simply not prepared to tap into their potential. More data that should debunk the myth that India Shining was wrong on facts.

Unemployment rate measured in terms of number of persons as per the usual principal and subsidiary status basis was only 2.5 per cent in 2004-05. The proportion of persons below the poverty line declined from around 36 per cent of the population in 1993-94 to 28 per cent in 2004-05 as per the uniform recall period. Based on the mixed recall period, the number of persons below the poverty line has declined to 22 per cent in 2004-05 from 26 per cent in 1999-2000. Further, the growth of average monthly per capita expenditure at constant prices between 1993-94 and 2004-05 (61st Round of NSSO) also indicates broadly similar growth across different rural and urban income classes, though it may have been less uniform for urban than for rural population.

If there is any lesson one must take from this and the success of Narendra Modi in Gujarat it is to have a hawk like eye on details and to use statistics to your advantage in the campaign by lacing them into populist rhetoric to drive home the message that reforms can deliver. The constant reinforcement of the message with data as Modi does in his speeches is the key.

Well that was about the past, now onto the future.

The survey goes into great detail on the policy response for future challenges. But the more interesting detail was in the performance of different states. Its a mixed picture but remember the data is mostly from 2004-2005. If something can be gleaned it is the strong correlation between Governance and Performance. AP which had Naidu at its helm, Gujarat which had Modi, Karnataka which had SM Krishna at its helm seem to consistently come on top. The other aspect that can be gleaned is that Smaller States have generally performed better HP, Kerala, Punjab, Haryana.

How does the Survey explain the performance, we find the answer elsewhere in the section on the Social Sector.

The performance of States across various sub-sectors, be it poverty, health or education related, reinforce each other. To some extent this disparity in performance between states may be accounted for by extraneous factors but largely can be attributed to governance and delivery of services. This calls for a greater emphasis on governance issues. While governance is a broader area to be tackled at various fronts, use of e-governance is becoming an important method to ensure better delivery and monitoring of services in different sectors including social sectors.

In closing Offstumped poses the question what about Communal Socialism ?

Curiosly enough the section on Social Sector lists all the pet themes of the UPA but no mention of schemes targetting Minorities exclusively. So what happened to Communal Budgeting ? A safe guess is to wait till the Budget speech tomorrow. But it is clear that the Economic Survey was as a secular exercise. One can only hope the Finance Minister keeps the Union Budget that way.

Originally posted here

http://offstumped.nationalinterest.in/2008/02/28/so-what-is-the-economic-survey-2007-2008-telling-us/#post-comments

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