Budget 2011: Address macroeconomic issues to sustain eco growth, says Assocham

NEW DELHI: The government should address macroeconomic issues like high fiscal deficit and rising inflation in the forthcoming Budget for sustainable growth of economy, a survey by industry body Assocham said.

The study also said that prices of raw material and energy are expected to go up further. Per unit cost of raw material have increased in the third quarter of the current fiscal by about 88 per cent, according to the survey of 423 business leaders.

The study said the growth story will lose its momentum "if existing macroeconomic concerns are not addressed and down-slide of corporate investments is not arrested".

India recorded 8.9 per cent growth in the first six months of the fiscal. For the full fiscal, the economy is expected to expand by 8.6 per cent.

Fiscal deficit had ballooned to 6.8 per cent of the GDP in 2009-10 and was pegged quite high at 5.5 per cent for the current fiscal.

On business confidence, primary and secondary sectors indicated relatively higher confidence, while services and infrastructure firms were less confident.

About 86 per cent of the respondents said "the operating conditions of businesses showed there was no let up from the inflationary measures". The analysis also said power and fuel bills are increasing.