The Economic Survey has projected a growth rate of 6.9% for the year 2004-05. This is due to better performance of industry and services, aided by the FDI inflows. This article provides an overview on the Economic Survey 2004-05 and discusses other factors that could have contributed to the better performance of the economy.

The Economic Survey, 2004-05 released by the Government of India exhibits sanguinity on the unrelenting optimism present in the Indian economy. The performance of the Indian economy in 2004-05 has surpassed the expectations at the commencement of the year. Sustained by a bounce back in the agriculture and related sectors, and assisted by better performance in industry and services, the economy recorded a growth rate of 8.5% in 2003-04. Based on the growth rate of 2003-04, the preliminary growth projections for the year 2004-05 were in the range of 6.2% to 7.4%. Unpretentious hopes were further trimmed down to approximately 6.1% when the rainfall became deficient in the crucial sowing months.

The survey, imparting a greater role to foreign investment, including both FDI and FII for aiding economic growth, says that trade liberalization, introduction of higher competition and open foreign investment policies have resulted in the transformation of several sectors of the Indian manufacturing sector into internationally viable bodies. Nevertheless, a well-built case exists for concentrating on the issue of restrictions in sectors like coal, mining, insurance, real estate and retail trade. The latest optimism in investment and exports are to be improved to help influence the growth of the Indian economy. However, accomplishment lies in the practice of dynamic reforms.

The survey affirms that hard work is desired to hasten growth and to accomplish the targets of the NCMP (National Common Minimum Program). The survey highlights five issues that need to be attended to: Step up investment in agriculture and allied activities, shorten procedures and loosen up entry-exit barriers to increase trade, augment the investment in infrastructure, mobilize resources, and facilitate the public and private participation in the infrastructure sector.

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