The allure of gold needs to be blunted by offering investors inflation-indexed bonds that are designed to improve the balance of payment and bring the current account deficit (CAD) down to a comfortable level, the economic survey said. “CAD in the first half of 2012-13 has been 4.6 per cent of GDP. Indications do not seem to suggest any improvement in the second half. There is a case for discouraging the import of gold,” the survey said.
Banks will find it hard to fund infrastructure projects as they have little headroom left after nearing their lending limits. Infrastructure development funds are expected to provide long-term low-cost debt to core sector projects by tapping savings such as insurance and pension funds.
Traditional retailers are giving strong competition to organised retailers, and the decision to permit foreign retailers will not affect small players. “Studies show there has been a strong competitive response from traditional retailers to organised retailers through improved business practices and technological upgradation,” the survey said.
Air India is likely to generate profits from normal operations by the end of the current fiscal. The survey said Air India would show a positive gross profit in 2012-13 on improved performance in the first half of this fiscal.