India’s Finance minister P Chidambaram has made it tough to decide whether the survey is giving green signal or red signal for country’s development saga. He emphasized that in terms of growth, the fiscal period between 2003 and 2008 (five years) was the best-ever five-year performance in the history of India since independence. However, the Economic Survey for 2007-08 has also warned about a number India urgently need to address to sustain the current growth momentum in future too.

Chidambaram, while presenting the Economic Survey in Lok Sabha on Feb 28, said that the country’s economy has taken a faster route to a higher growth phase and balanced the trend of the GDP more than 8 per cent every year since 2003-04. He assured the nation that excellent growth rate in domestic investment and savings rates would provide the necessary resources to meet the average GDP growth of 9 per cent, target of the 11th Five-Year Plan. Macro-economic fundamentals would further inspire confidence and the climate for investment in India is full of optimism. The growth of government revenues would also help in maintaining fiscal consolidation as well.

India also experienced higher Inflation rate in the second half of 2006-07 but the government successfully controlled it in current year even when the global commodity prices and capital flows were on upsurge.

The government took cautious approach while talked about agricultural growth and said that it continued to fluctuate due to its dependence on monsoon. The overall foodgrains production in 2007-08 is likely to fall short of the target by 2.2 million tones. However, it is likely to touch 10.1 million tones, which will be higher to the second estimates of 2006-07. The production of kharif foodgrains is likely to cross 5.3 million tones, 4.8 per cent higher than 2006-07, and the rabi production is likely to go lower by 3.3 million tonnes.

Economic survey clearly provided a critical analysis of the economic condition and mentioned the need for additional reforms to meet the dream of double-digit growth in coming days. The good news for country’s economy was that the size of it at market exchange rate is about to cross $1 trillion.

Country has seen a sharp rise in domestic investment (13.1%) and saving (11.3%) in past five years. The rise in investment was actually driven by private investment in domestic sectors. The sub-prime mortgage market crisis and the downturn in housing market in US have its own impact on India’s Balance of Payments. Monetary policy reforms taken by the US and other developed countries had its immediate impact on India’s economy and people would feel the impact in the next six months.

After all we can say that India is looking down but not out and hopefully would achieve first 9% of the GDP growth and then double-digit growth in coming days.