The Macro Economic Framework Statement
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The Macro Economic Framework Statement forms an integral part of the Fiscal Responsibility and Budget Management Act, 2003 passed by the Government of India along with the Medium-term Fiscal Policy Statement and the Fiscal Policy Strategy Statement.
The Act provides for the responsibility of the Central Government to ascertain inter-generational equity in financial management and long-term macro-economic stability by attaining sufficient revenue surplus and removing financial obstacles in the effective conduct of monetary policy. The debt management of the government is to remain consistent with fiscal sustainability through limits on the central government borrowings, debt, and deficits. From the Macro Economic Framework Statement, the transparency of the fiscal operations of the central government is understood.
The Macro Economic Framework Statement contains an estimation of the growth potential of the economy with specification of certain assumptions. It emphasizes the growth in the gross domestic product (GDP) of the country, the fiscal balance of the central government as exhibited in the revenue balance and gross fiscal balance, and the external sector balance of the economy as stated in the current account balance of the balance of payments of the Indian economy. The inflationary trend as per the Wholesale Price Index (WPI), year-on-year, was that inflation peaked at 6.7% on February 3, 2007 and is expected to remain on the higher side throughout year.
The Macro Economic Framework Statement states that broad based growth is essential for economic development and poverty alleviation for which an increase in investment in the economy is essential. From the last few years, there has been a rise in the merchandise export growth which clearly projects the revival of growth in the manufacturing sector and the increase in export competitiveness. However, from The Macro Economic Framework Statement, it is seen that the present rise in the GDP of the country indicates a positive outlook for economic growth, mainly in the industrial sector, because of increased capacity utilization, improved industrial climate, expanding external and domestic demand, and ease in availability of credit.
The Macro Economic Framework Statement contains an estimation of the growth potential of the economy with specification of certain assumptions. It emphasizes the growth in the gross domestic product (GDP) of the country, the fiscal balance of the central government as exhibited in the revenue balance and gross fiscal balance, and the external sector balance of the economy as stated in the current account balance of the balance of payments of the Indian economy. The inflationary trend as per the Wholesale Price Index (WPI), year-on-year, was that inflation peaked at 6.7% on February 3, 2007 and is expected to remain on the higher side throughout year.
The Macro Economic Framework Statement states that broad based growth is essential for economic development and poverty alleviation for which an increase in investment in the economy is essential. From the last few years, there has been a rise in the merchandise export growth which clearly projects the revival of growth in the manufacturing sector and the increase in export competitiveness. However, from The Macro Economic Framework Statement, it is seen that the present rise in the GDP of the country indicates a positive outlook for economic growth, mainly in the industrial sector, because of increased capacity utilization, improved industrial climate, expanding external and domestic demand, and ease in availability of credit.
