The Economic survey suggests: "Labour laws create strong incentives for firms to avoid hiring a large number of low skill workers. An array of problems holds back the entry and maturation of new firms."
The fiscal situation, in particular, has turned out to be far worse than the UPA government's window-dressing made it out to be. Add untamed inflation and the possibility of a drought this year, and Finance Minister Arun Jaitley becomes the man in the eye of a perfect storm.
The tone of the report is bound to increase speculation that Finance Minister Arun Jaitley will announce a higher fiscal deficit target in his maiden Budget, which he presents to Parliament on Thursday.
The Narendra Modi-led government's first survey pointed that not all the money put into subsidy schemes reaches the poor while attributing rise in fiscal deficit after 2008-09 to increase in subsidies.
"The process of restructuring CIL needs to be pushed through swiftly to boost coal production," said the finance ministry in the Economic Survey report presented to Parliament on Wednesday.
The Economic Survey pointed out that time overruns in the implementation of projects has become a major cause for underachievement in many of the infrastructure sectors.
National Investment And Manufacturing Zones are conceptualised as integrated industrial townships of at least 5,000 hectares with world class infrastructure.
It also said with the improvement in overall macroeconomic environment, industry is expected to revive and growth can accelerate gradually over the next two years.
After recovering in 2009-10 and 2010-11, GDP growth slowed down to decade's low of 4.5 per cent in 2012-13. It picked up marginally to 4.7 per cent in 2013-14.
However, there are risks to the outlook for inflation from a possible sub-normal monsoon during 2014-15, a possible step up in the pass-through of international crude oil prices and exchange rate volatility, the survey added.
A day ahead of presenting his maiden Budget, Finance Minister Arun Jaitley tabled the Economic Survey in Lok Sabha. Here are the key highlights from the document.
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