India's economy is on track on to record its worst growth in a decade, and that should serve as a wake-up call to revive reforms and remove obstacles to growth, the Economic Survey for the current fiscal year tabled in Parliament said on Wednesday.
India's economy will recoup momentum and grow at between 6.1% and 6.7% in the year to March 2014 from an estimated 5% this year, but that depends on India's ability to create millions of jobs and multiply incomes, said the annual report card.
India is seeing the worst growth since the drought year of 2002-03.
Outspoken chief economic adviser Raghuram Rajan said efforts must be made to increase domestic savings - both government and household - to ensure that India's focus shifts from being consumption-centric to investment-centric.
"India is in a difficult but not impossible situation, we are at or beyond the turning point of the economy," he said.
The survey made a strong pitch for the Reserve Bank of India to take necessary action to reduce the cost of borrowings. It also noted that inflation measured on wholesale prices showed signs of easing but retail prices remained a cause for concern as food prices stayed up. It recommended boosting food supplies to control prices.
The report called for a cut in fuel subsidy, seeking hikes in the prices of diesel and cooking gas, and described a bloated petroleum subsidy bill as a "key fiscal risk." The report said India should not take a global economic revival for granted and move to restore domestic balance.
"The stress on fiscal consolidation through broadening the tax base and targeting wasteful and distortionary subsidies is welcome," said Adi Godrej, president, Confederation of Indian Industry.
"Green shoots seem to be on the horizon. The survey has pointed out the need to build on this momentum," said Naina Lal Kidwai, president, FICCI.