Economic growth may recover in 2013-14 if the government unleashes reforms to remove supply bottlenecks and maintain stability, Reserve Bank of India (RBI) said in its annual report.
Economic growth may get a boost from institutional reforms like better regulation of natural resources, improved harnessing of water resources, investing more in skill formation, RBI said.
Other reforms suggested by the central bank include digitalising land records, better integration of regional agricultural markets, freer labour markets and more competitive domestic markets.
On the backdrop of deceleration in economic growth, government may find it difficult to attain the budgeted tax-GDP ratio of 10.9 per cent even with the budgeted tax buoyancy of over 19 per cent, RBI said.
The report noted that there is a need to stay focus on controlling twin deficit risks.
In 2013-14, government aims to contain fiscal deficit at 4.8 per cent of GDP and expects it to be achieved through higher mobilisation of disinvestment proceeds, tax revenues, telecom receipts and reduction in expenditure on subsidies.
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