GDP growth rate revised to 6.4 per cent for 1999-2000
Quick estimates of national income, consumption expenditure, saving and capital formation released by the Central Statistical Organisation on 30.01.2001 pegged the GDP at constant prices in 1999-2000 at Rs.1,151,991 crore compared to Rs.1,083,047 crore in 1998-99.

The growth rate of GDP and the various sectors of the economy are given below :

GDP 1998-99 (Percent) 1999-2000 (Percent)
Agriculture 7.1 0.7
Manufacturing Sector 2.5 6.8
Mining and Quarrying 1.3 1.7
Trade, Hotels and Restaurants 7 7.9
Financing, insurance real estate and business service 8.4 10.1
Banking and Insurance 10.5 12.3
Real estate and business services 6.1 7.5
Transport, storage and communication sector 7.3 8.3
Railways 1.8 9
Electricity, gas and water supply 6.4 5.2

Export growth touches 20.42% mark

Export growth during the first nine months of the current fiscal continued at 20.42 per cent though growth during December came down to 17.33 per cent.

The total value of exports from April to December is calculated at $32.26 billion, while for the month of December exports are estimated at $3.59 billion. The growth in exports has helped to shrink the trade deficit to $5.88 billion which is lower than last years' level of $8.22 billion.

Non-oil imports are 8.31 per cent lower than the corresponding period last year. In absolute terms it is $25.7 billion against $28.03 billion in the same period last fiscal. The total import bill is $38.15 billion for April to December 2000 representing a growth of 8.95 per cent over the corresponding period last year. 

Oil imports have risen by 78.23 per cent, representing an absolute growth of $12.45 billion compared to April-December in 1999-2000.

Forex reserves cross $ 41 billion

Foreign currency reserves crossed $ 41 billion for the week ending February 2 following increased institutional inflows and remittances from abroad. The upsurge continued with fresh inflows of $ 347 million during the same week, taking the forex reserves to $41,274 million compared to $40,927 million in the previous week.

Software exports to touch $ 9.5 b by 2001-02

The government has projected exports of software products to reach a level of $ 9.5 billion by the year 2001-02 from $4.6 billion in 1999-2000, Shri Raman Singh Minister of State for Commerce and Industry said at a seminar on opportunities in IT and telecom sector at the India-expo 2001 in Dubai. Exports during the current financial year are expected to reach a level of $6.3 billion. 

FDI flows touch $4.5 bn

The FDI inflows into the country touched $ 4.5 billion during 2000, registering an increase of 14.67 per cent over the inflow of $4 billion in the previous year. 

The last two years have shown a significant step-up in the inflow-approval ratio and the current realisation rate of FDI into India is around 52 per cent, sustaining the trend of 1999. The amount of FDI approved in 2000 stood at $8.6 billion as against $6.7 billion in 1999, registering a growth of 30.57 per cent.

Referring to the FDI performance at the meeting of the parliamentary consultative committee attached to his ministry, the Union Minister of Commerce and Industry Shri Murasoli Maran said the institutional mechanism of the Foreign Investment Implementation Authority (FIIA) is yielding positive results. FIIA was set up in 1999 to provide a single point interface between foreign investors and the government both at the central and the state levels.

Panel recommends setting up export fund, industrial parks in J&K

The Report of the Committee on promotion of exports from Jammu and Kashmir set up by the department of commerce and industry under the chairmanship of Shri H.A.C. Prasad, economic advisor, has recommended setting up of an export development fund and export promotion industrial parks to boost exports from the state.

The state has a very good export potential in items like handicrafts and carpets, sports goods, electronics and software, agro-products and leather goods, the panel said adding it has suggested an export strategy taking into account all the ground realities.

The export development fund would take up specific activities such as setting up of pioneering and pilot projects for exports, common facilities for exports and standardisation and quality. 

The report has recommended the air cargo complex at Srinagar airport should be made functional and walk in type cold storage for horticulture and floriculture products as in Guwahati be also set up for Srinagar and Jammu.

It also suggested setting up of two inland container depots (ICDS), an air cargo complex and a trade-cum-exhibition centre.

Recommendations of the committee have been broadly classified into four categories namely, extension of the North-East region programme implemented by department of commerce to J&K, extension of North-East package by other departments relevant to exports, other schemes in the exim policy which could be relevant to the state, and role of the state government in boosting exports. The Committee has also said that since the state was located in a disadvantaged region, the existing special economic zone (SEZ) should be modified to provide suitable benefits to the state. 

Economic Survey for 2000-01 :

The economic survey for 2000-01 presented in the Parliament on February 23, 2001 laid stress on carrying out the reform agenda to get the economy out of the groove of annual growth rate of average of 6%. The survey calls for a `credible medium term programme for fiscal management'. Due to a surge in oil prices and increased cost of debt servicing specially of RIB & IMD, there is an increase in current account deficit. In the context of persistently high deficits, the survey points to the urgency of framing this year's fiscal strategy within the parameters of the Fiscal Responsibility Bill. 

The overall economic growth of GDP has been projected at 6% compared to 6.4% last year. The services sector growth rate has fallen from 9.6% in 1999-2000 to 8.3% in the current fiscal. Industrial growth is likely to be 6.6% as against 6.4% last year. Agricultural production will show a marginal increase of 0.9% after inclusion of production of commercial crop from 0.7% in the last fiscal. Foodgrain production dropped to 199 m tonne this year from 208.9 m tonne in the previous fiscal. As per April-December 2000 data, exports have increased by 20.4% and imports by 9.0% in terms of US dollars. External debt dropped to 2.9% of GDP. The fiscal deficit of the Centre and State governments, at present, is at 10% of GDP. The economic survey indicates that while deciding the interest rate on small savings and pension funds, the government needs to take inflation level into account and benchmark administered rates against equivalent market instruments to put a cap on its interest payments. 

Key Macro economic indicators are given below : 

1. Gross national product (Rs.thousand crore) 
At current prices 
1771 1972.7
2. Gross domestic product (Rs. thousand product)
At current prices 
1786.4 1985.5
3. Foodgrains production (million tonnes) 208.9 199
4. Index of industrial Production 154.7 159.6
5. Electricity generated (billion Kwh)  480.7 372.6
6. Wholesale price index 150.9 158.1
7. Imports at current prices (US $ million) 47212 38150
8. Exports at current prices (US $ million) 37599 32266
9. Foreign currency assets (US $ million) 35058 38361

Major recommendations made in the economic survey are as follows :-

Privatisation : 

  • It is necessary to get the government out of the business of production and enhance its performance in the provision of public goods. Accelerated privatisation of the competitive segment of the public sector will serve in stimulating industrial growth. 
Subsidies : 
  • There is a need to reduce subsidies, target the remaining subsidies on the poor and search for more efficient mechanism for protecting them.
Administered Price Mechanism : 
  • Deregulation of coal and petroleum sectors so that fertilizer and power producers are free to use any energy input, domestic or imported.
  • Need for comprehensive de-control of production, storage, transport trade and processing of agricultural goods and inputs used therein.
Tax Reforms : 
  • Systematic efforts needed for abolishing economically unjustifiable exemptions and reductions.
  • Modernisation of tax administration required. 
  • More services should be brought under the tax net to offset the likely loss of revenue through lower customs tariffs. 
Interest Costs : 
  • The administered interest rates of pension and provident funds should take account of the inflation base, the effective term of the deposits and available tax exemptions.
  • Urban Land Ceiling Act and and Rent Control Laws to be modified. 
Bankruptcy Law : 
  • Repeal of SICA, dissolution of BIFR and inclusion of modern bankruptcy provisions in the Companies Act should be done to facilitate restructuring of Indian industry.
Power Reforms
  • Pricing of power by taking into account the cost of production-cum-distribution essential.
  • Transmission and distribution losses need to be tackled on a war-footing to make efficient pricing feasible.