Tuesday, February 28 2006 10:48 Hrs (IST) - World Time -

New Delhi: A day ahead of the Budget, the Economic Survey yesterday(Feb 27,2006) prescribed bold initiatives, including hastening of tax and labour reforms and measures to push infrastructure development, while projecting moderate inflation despite volatile global oil prices.

Though the economy was on a roll with 8.1 per cent growth projected this year, the Survey, however, warned that there was risk of hardening interest rates, higher inflation and fiscal deficit in the face of global oil crisis.

Without tackling the major problem of power, it would be difficult to move on to high 8-10 per cent growth, the report card of the Government said.

The 2005-06 Survey was tabled in Parliament by Finance Minister P Chidambaram, who promised to cut deficits and deal with the problem of unprecedented oil prices and upward pressure on interest rate.

The voluminous document advocated unburdening the industry from high level of taxes and distortive exemptions that provided perverse incentives. It also favoured levying user charges and cutting unwanted subsidies.

Welcoming the hard reforms prescribed by the Survey, trade and industry said they would not get the requisite shot in the arm without implementing the pragmatic suggestion of debottlenecking the infrastructure and speeding up tax reforms.

Simplification and digitisation of tax administration remains a pre-requisite for a transparent and hassle free tax system, the Survey said.