Global economy is risky business

It suggested that the country should adopt suitable macro policies in carefully managing the impact of a potential global transition from low interest rate and currency imbalances to a more sustainable regime.

The survey proposed that in order to put India’s export growth on a higher and sustainable growth trajectory micro strategies for export growth-based on various policy pronouncements needed to be designed.

A reduction in tariffs towards the already announced alignment of tariff structure with Asean countries was likely to have beneficial effect on the competitiveness of the economy, it said.

Stressing on the competitive advantage that India has in the area of services exports, the survey said efforts towards strengthening the services sector for export promotion needed to be sustained and intensified. A further simplification of domestic policy regime, rules and procedures was likely to attract higher foreign investment, supporting the investment needs of the economy for higher growth, the survey added.

With regards to rupee’s appreciation vis-a-vis dollar that has been affecting Indian exporters, the survey pointed out that trade liberalisation was likely to counter some of the upward pressure on the exchange rate of the rupee.

The current exchange rate policy of focussing on managing volatility with no fixed rate target, while allowing the underlying demand and supply conditions to determine the exchange rate movement should be continued, the survey said.