New Delhi, March 21
In its post-Budget memorandum, industry chamber FICCI said the economy's impressive growth would be sustained with the Budget proposals, which have emphasised stability in fiscal management.
However, the chamber has noted that though exports growth of merchandise products has decelerated, the numbers remain close to 20 per cent. Services sector exports are expected to maintain the trend growth and the sharp pick up in oil and non-oil exports is expected to push up the current account deficit to three per cent of the GDP. But the high non-debt creating inflows would provide enough comfort to ensure stability at the external front.
The chamber has also called the growth in agriculture at 2.3 per cent as "lacklustre." A sustained increase in agriculture production at the rate of 4 per cent would be required for a further acceleration in growth of GDP, it said. Share of agriculture in GDP has come down to 19.7 per cent in 2005-06 and its contribution to overall growth is only 5.8 per cent.
In case of manufactured goods, the increase in prices in January 2006 was only 2.8 per cent, just around half the 5.8 per cent increase in January 2005. Overall increase in manufactured good prices in April-January 2005-06 was down to 3.5 per cent from the 6.6 per cent increase in April-January 2004-05.
The Budget estimates reveal that both gross and net market borrowings of the Central Government will grow at a substantially slower pace in 2006-07 as compared to the previous year, said the chamber. The Budget estimates the revenue from disinvestments to go up by 63 per cent to Rs 3,846 crore in 2006-07. Receipts from disinvestments have slowed down by 46.7 per cent in 2005-06, said the chamber.