Finance Minister Pranab Mukherjee today tabled the economic survey for the fiscal year 2011 in Parliament.
The survey is optimistic on growth with a forecast of 8.75% to 9.25% growth in FY12. The survey projects the FY11 fiscal deficit at 4.8% on a higher GDP base. However, inflation continues to be the key concern for the nation. The survey warned that inflation would be at elevated levels due to the West Asia crisis and demand pressures. Speaking to CNBC-TV18 earlier today, Kaushik Basu, Chief Economic Advisor said, "The crude shock can be one severe downside to the projected 9% plus growth. We can handle the crude shocks at its current levels. If the shock goes deeper, we will begin to have difficulties which will be more than inflation." "Beyond a point, our factories and various operations working on oil will begin to hit. This will be a downward shock on India's growth. If this happens, it will be a global shock and a slow down on growth", he added. Basu also clarified that the government would step in to soften the blow of runway crude prices. On the issue of teaser loans, the survey said that banks should be encouraged to introduce these products. This is in sharp contrast to the RBI, which has warned against these products. The survey adds that teaser loans in India were not given to sub-prime borrowers, like in the US, and have actually enabled new home buyers to enter this market. The survey is emphatic on the point that restrictions on these loans should be minimal. However, ICICI Bank's MD & CEO Chanda Kochhar downplays this stance. She said,Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
