Indian Economic Survey: 2009-10

Economic Survey 2009-10 was presented in the Parliament on February 25, 2010 on the eve of the Budget. The theme of the Economic survey 2009-10 was that " Economy bounces back from the Global Slowdown and is now on the track to achieve its growth path of 9%"

In the following pages,My efforts to present its readers a very simplified version of the Economic Survey 2009-10.

The idea behind this work is to make an average student, who is not from economics background understands the basics of the macroeconomic trends of our economy, which is very much essential for every aspirant of every examination.

For advanced study , please download these 11 Chapters from the website of Government of India.but some,lucid points I am pointed here.

 

  

What is an Economic Survey? 

Economic survey is an annual commentary on the state of the economy of India which is put together by Finance Ministry of India. It is a document which presents economic development during the course of the year. The draft of the survey is prepared by Department of Economic Affairs and cleared by Chief economic Advisor and the secretary Economic Affairs. The final version is vetted by Finance secretary and Finance Minister.

 When an Economic Survey is presented?
Economic survey is presented every year shortly before presenting the Union Budget of govt. of India, or just after the railway budget. Out of the 10 chapters presented the first chapter which is titled “State of the Economy and prospects” deals in detail with overall macroeconomic performance of the country.
What is the objective of an Economic Survey?An economic Survey provides an opportunity for the government of India to spell out its economic agenda. The govt. also represents its issues and priorities.

Economic Survey 2009-10: GDP Outlook 

Introduction: 

Year 2009-10 started as a difficult Year for Indian economy. The Global Economic Slowdown had retarded the growth of our economy more prominently in the second half of 2008-09. This was a time when the Global Financial crisis was at its full swing and had spread its tentacles to all parts of the word.

Base year:
Here, a point has to be noted that with the release of the quick estimates of National Income for year 2008-09, the central statistical organization (CSO) and changed the base year of its NAS (National Accounts Statistics) from 1999-2000 to 2004-05.
Growth Projects:

1. The overall growth of GDP at factor Cost at constant prices in 2008-09 as per revised estimates released by the Central statistical organization was 6.7 %.
2. The turnaround in the Indian economy came in the second quarter of 2009-10 when India’s economy grew by 7.9 %.
3. As per the advance estimates for GDP for 2009-10 released by the central statistical organization the economy is expected to grow at 7.2% in 2009-10.
4. Industry and service sectors are expected to grow by 8.2 & 8.7% respectively.
5. The manufacturing sector had shown a declining trend for last 8 quarters (since 2007-08), but now has got some momentum.
6. There was also a decline of agricultural output by 0.2 % in 2009-10 due to poor Monsoons.
7. The economic survey expected that economy is likely to grow by 8.75% in 2010-11 and return to 9% growth in 2010-12. Following chart shows the growth of GDP (at Factor Cost 2004-05 prices)
8. Over all Savings rate for 2008-09 is 32.5% of GDP which is slightly less than the previous year 2007-08 (34.9%). The Capital Formation rate for 2008-09 is 34.9% of GDP which is too slightly less than last year 2007-08 (37.7%)

Per capita National Income for the Year 2009-10 is Rs. 43749 (factor cost at current prices) compared to Rs. 40141 for the previous year 2008-09. The following graphic shows the trend of the per Capita Net National Income:

Per capita Growth:

1. The growth rates in per capita income and consumption are the gross measures of welfare in general. The percapita income as well as consumption has increased, yet the growth in these two parameters has decreased. This reflects the decline in overall GDP growth.
2. Growth in per capita income in 2007-08 was 8.1% which declined to 5.3% in 2009-10.
3. Growth in percapita consumption was 8.3% in 2007-08 which has declined to 2.7 % in 2009-10.
4. The following graphics show the trend of the per capita income and consumption at 2004-05 market prices.
    

Economic Survey 2009-10: Inflation

1. Economic Survey 2009-10 says that WPI (Wholesale Price Index) inflation has been volatile in 2009-10 and it is a major concern for the country.
2. It was 1.2 % in March 2009 and declined continuously to go into negative zone during June-August 2009.
3. While turning to positive in September 2009, accelerated to 4.8% in November and 7.3% in December 2009.From march to December 2009 the WPI inflation is 8%.
4. This soaring inflation was mainly contributed by the Composite Food Index which has a weight age of 25.4% in overall inflation calculation.
5. The Food Inflation was 19.8 % in December 2009 compared to 8.6% in 2008.
6. Thus nearly 67% of the overall inflation was contributed by the food items , followed by Power commodity Group and remaining 21% manufactured nonfood articles.
7. Among the food items too, Milk contributed to 20%, Eggs, meat and fish contributed to 20% , rice 10%, Wheat 6%, pulses 9% , Potatoes 9% and tomatoes 6 % (all figures approximately, source economic survey)
8. There was also supply side bottlenecks in some of the essential commodities due to weak and irregular monsoons.
    
    
   And,for more information please look into Ministry of Finance website.There full desription is mentioned. 
    
   Source:Ministry of Finance
   
   
   
   
   
   

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