Economic Survey turns a new chapter
The Economic Survey has made some significant departures from the documents churned out in recent years. A new chapter Challenges, policy response and medium term prospects seeks to provide a more analytical view of the economy. Capital flows, states’ performance and governance seem to have received particular attention. While the structural change of the Survey is less than radical, some of the policy reform options outlined are truly radical: privatisation of coal mines, 100% foreign direct investment in rural banks, 51% FDI in rural insurance. Chapters have been reorganised to better reflect economic dynamics. ‘Prices and food management’ has now become ‘Prices and monetary management’, an acknowledgement that monetary management has become more important in context of inflation. Food management finds a mention with agriculture now, which is appropriate as in context of rising global food prices and production volatility domestic supply would have to be augmented to meet growing demand. The chapter on Banking and monetary management has been split. Banking together with capital and commodities markets comes under ‘Financial intermediation and markets’ in keeping with the blurring of boundaries between various segments of the financial markets. The Survey has also attempted to provide background to the analysis through background papers. This is most evident, claims the government, in the External Sector chapter. The External sector chapter is most reflective of this new emphasis. It mentions, for instance, India’s stand on various issues at the WTO. It also has a box on tax and trade policy implications of e-commerce. Some of the numbers have been recast to facilitate international comparison and some new ones included to facilitate better understanding and make global comparisons easier. Now that the world is looking at India this is a very relevant change in perspective.