Mid-term review calls for focus on farming, labour

The mid-term review of the Indian economy for the year 2007-08, prepared by the finance ministry...

The mid-term review of the Indian economy for the year 2007-08, prepared by the finance ministry was tabled in Parliament on Friday. The review pointed out that focused attention on growth in agriculture and absorption of labour in productive areas are some of the key areas that the Government needs to focus on to make the growth inclusive.

It also noted that the impetus to growth would be provided by industry and services, which will become increasingly competitive. The review said that the economy is witnessing a robust growth for four years in a row and that the buoyant growth in the first half of the current year reaffirms continuation of this momentum.

While the short-term challenges include managing inflows without endangering growth and price stability, the challenge ahead is to make growth even more inclusive, it noted.

However, according to the review, management of inflows is a complex problem as it is interlinked with monetary management and inflation, trade policy, capital market development and other related reform issues, the issues relating to production, investment and growth. In that regard, the review said, “an integrated view has to be taken so as to maximise the benefit of capital flows and to minimise the potential short-term cost and risks to the economy”.

One of the other issues for the Government is reform of subsidies. According to the review, “the main objective of reform of the subsidy regime is to make them explicit, transparent and work for the poor and the needy as per the NCMP mandate”.

It stated that reform can “unleash a virtuous cycle of enhancing the consumption of specific essential items by the poor, reorient public expenditure for investment and infrastructure and raise the growth of income and employment thereby reducing the number of poor”.