India's economy will revert to the pre-crisis growth level of 9 per cent in the next financial year, buoyed by strong fundamentals, the Economic Survey 2010-11 predicted on Friday.
"Based on the performance of the economy over the last five years and analysis of the underlying trends... India's real GDP is expected to grow by 9 per cent (+/-0.25) in 2011-12," the pre-Budget Survey tabled in Parliament today said.
For the current financial year, the economy is expected to grow at 8.6 per cent, it said.
The Indian economy had grown at a rate above 9 per cent for three consecutive years, starting 2005-06, the Survey said, adding, "So the economy is expected to revert to pre-crisis growth levels next year."
It further said that the growth is broad-based, with a rebound in agriculture output and continued momentum in manufacturing and private services.
The agriculture sector is likely to grow at the rate of 5.4 per cent in 2010-11, while industrial output is expected to grow by 8.6 per cent and the manufacturing sector is likely to register 9.1 per cent expansion, it added.
Recognising the fact that prices continue to be high, the Survey has underlined the need to "monitor emerging trends in inflation" on a monthly basis while suggesting that the government should improve delivery mechanism by strengthening the situation and addressing "corruption."
The 456-page report said inflation is expected to be higher than "what would be if the country was not on the growth curve."
About the growth projections, the document said that with good monsoons, the agriculture sector is expected to grow by 5.4 per cent during the current financial year up from a lowly 0.4 per cent in the last one.
"Rise in food inflation and the critical role of agriculture underlines the need for larger investments in the agriculture sector enroute to the second green revolution," it said.
In its endeavour to achieve higher economic growth, the government should pursue a reform agenda which include over a dozen steps including streamlining land acquisition and faster environmental clearance for infrastructure projects.
The Survey called for an early introduction of the Goods and Service Tax (GST).
It underlined the need for private sector participation in social sectors such as health and education in the form of 'public-social-private' partnership for supplementing the government efforts.
In the backdrop of difficulties in land acquisition, the Survey, which is considered as report card of the government along a paper prescribing policies to be pursued, suggested formation of a National Forest Land Bank.
This land bank will have clear titles to reduce approval time for forest go ahead.
It said that focus of the government's flagship programme 'Mahatma Gandhi National Rural Employment Guarantee Scheme' should be shifted to permanent asset building and infrastructure development.