The Economic Survey says that economy may clock only five per cent growth this fiscal against the projected target of 7.6 per cent. The economy is projected to grow between 6.1 to 6.7 per cent in the next fiscal. The Survey tabled in the Lok Sabha by the Finance Minister, Mr. P.Chidambaram makes a strong case for widening of tax base and cutting of subsidies.

The Survey says economic downturn is more or less over and economy is looking up. While cautioning against raising tax rates, Survey says to augment revenue, the Government should make efforts to cut subsidies particularly on petroleum products and to reduce expenditure. Referring to price situation, the Survey said that higher food inflation will continue to be an area of concern with inflation gradually inching towards double digit in December, 2012.

The other areas of concern highlighted in the Survey include widening current account deficit, absence of clear signs of revival of economic activities and lack of assured supply of raw material to projects especially in power sector. The Survey however hoped that measures announced by the Government in the recent months will help in restoring the fiscal health of the Government and check widening current account deficit.

Speaking to reporters after the Survey was tabled in Parliament, the Chief Economic Advisor to Finance Ministry, Raghuram G. Rajan said India has navigated difficult times in past and with good policies it will come through stronger.

He said in order to meet the challenges of economy, shifting national spending from consumption to investment, removing the bottlenecks to investment and growth and job creation are some of the important areas to be addressed.