The Economic Survey to be tabled in Parliament on Wednesday is likely to suggest a series of steps to arrest the declining GDP growth, which is estimated to be at the decade-low of 5% in the current fiscal.
Prepared by a team of economists, led by Chief Economic Advisor Raghuram Rajan, the Survey is likely to make a strong case for accelerating economic reforms to neutralise domestic and global factors which have stymied growth.
As the official assessment of the country's economy, the Survey is customarily tabled in Parliament by finance minister ahead of the General Budget. The document is viewed as being important because it prescribes steps for the government to deal with various economic problems, leaving the onus of taking hard decisions on the government.
The major focus of the Survey this year is likely to be on pushing economic growth, which has been projected by the Central Statistical Organisation (CSO) at 5% for this fiscal, sharply lower than the original estimate of 7.6% (+/- 0.25%).
Taking into account persistent contraction of industrial production and exports, the Survey is expected to suggest measures to deal with the issues impacting them.
It may, however, welcome the government's recent reform initiatives with regard to partially deregulating diesel price, opening up of FDI in retail and liberalising foreign investment norms for various sectors, including insurance.
On the taxation front, the survey could pitch for early implementation of the Goods and Services Tax (GST) and the Direct Taxes Code (DTC), with a view to expanding tax base and raising tax-GDP ratio.
The issues like surge in gold import and widening Current Account Deficit (CAD) too are likely to figure prominently in the Survey.
Ahead of the budget, finance minister P Chidambaram on Tuesday held consultations with Reserve Bank Governor Duvvuri Subbarao in New Delhi.
"The minister held a meeting with RBI Governor," a source told PTI, without disclosing the details of the deliberations.
Chidambaram is scheduled to unveil the Budget for 2013-14 in the Lok Sabha on February 28, preceded by Economic Survey on Wednesday.
The meeting assumes significance as Chidambaram had earlier assured to bring down the fiscal deficit to 4.8% of Gross Domestic Product (GDP) in 2013-14, from 5.3% estimated in the current fiscal.
Fiscal deficit is a measure of government borrowings, which is conducted by the Reserve Bank on behalf of the Centre.
Besides other things, Chidambaram is also expected to announce steps to contain current account deficit (CAD), which has been widening mainly on account of a surge in import of gold.
An RBI Committee had recently suggested fiscal and non fiscal steps to check import of the yellow metal. finance ministry, which had earlier raised the import duty on gold from 4% to 6%, could propose more steps in the budget to curb its imports.