Second recession in developed world could mar recovery: Survey

The Economic Survey today warned that second recession in quick succession in the developed countries could mar the economic recovery at home which is only at its nascent stage.

"The risk of a second-dip recession in the industrialised nations continues to cast a shadow on our nascent recovery," said the Survey tabled by Finance Minister Pranab Mukherjee in Parliament ahead of the Budget.

Following the impact of the global slowdown, India's growth rate slipped to 6.7 per cent during 2008-09 from over nine per cent during the three preceding years.

The economy, driven by stimulus provided by the government since the global meltdown, is showing signs of recovery and is estimated to grow by 7.2 per cent in 2009-10.

Another risk facing India, which the Survey pointed out seems to be rapidly returning to the buoyant years preceding 2008, is in the country's agricultural sector.

"The sector that continues to cause concern and, all said and done, is still the mainstay of the Indian population, is agriculture... The drought-hit agricultural sector is not yet back to normal performance," the Survey noted.

Some of the important steps suggested by the Survey to propell economic growth include raising farm productivity, introducing coupon system for food and fertiliser, improving effeciency of tax system and reforming bureaucracy.

"If we can put into effect some important policy measures, there is no reason why India cannot achieve double-digit gross domestic product (GDP) growth and a rapid diminution of poverty", said the Economic Survey.

India is likely to grow at 8.5 per cent (+/- 0.25 per cent) during 2010-11 and 9 per cent in 2011-12, it said.

"It is good to see India having averted a recession and come out of the slowdown faster than pundits predicted in April 2009; and an analysis ... Suggests than the nation's medium- and long-term prognosis is excellent," the Survey added.