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Partial Vision

Partial Vision THE government of India's pre-budget Economic Survey 1993-94 seeks to sweep under the carpet the grimmer aspects of the macro-economic situation by focusing on two apparently positive developments, namely, the buoyancy in the capital market and the inflows of foreign exchange. On the likely rate of growth of the economy in 1993-94 the Survey's claims are exaggerated. Despite the expected decline of 0.9 per cent in the index of agricultural production, the expected growth of gross domestic product (GDP) at 1980-81 prices is placed at 3.8 per cent, following the CSO's advance estimates. This is made possible by assuming a growth of 2.3 per cent in GDP originating in agriculture and allied sectors, which rests on the further assumption of lower input use in agriculture, particularly of potassic and phosphatic fertilisers. This is patently questionable. In a year of reduced output, input costs as a proportion of output should be expected to be higher and hence value added lower. Further, production of all fertilisers taken together is expected to be somewhat higher in 1993-94 than in the previous year. In any case, potassic and phosphatic fertilisers constitute only a small proportion of total fertiliser consumption, Taking more realistic estimates of sectoral growth rates, overall GDP growth in 1993-94 is unlikely to be more than 2.8 per cent, giving an average growth rate of 2.6 per cent per annum for the last three years.

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