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Official survey says Indian economy will keep growing, but calls for key reforms

Official survey says Indian economy will keep growing, but calls for key reforms

India's booming economy is likely to keep growing at a fast pace in the coming five years, the government said Thursday, but that poor infrastructure and outdated regulations will keep it from achieving an even higher rate of growth.
The economy is expected to grow by 8.7 percent this fiscal year, which ends March 31, slowing from 9.6 percent growth rate it achieved in the 2006-2007 fiscal year, its fastest expansion in nearly two decades, according to the government's annual Economic Survey, released Thursday.
The survey said it was forecasting a slowdown because of tighter monetary policy and a weakening global economy.
After presenting the survey _ delivered to Parliament a day ahead of the annual budget presentation _ Finance Minister P. Chidambaram told reporters he thought India's next fiscal year looked promising, despite slowing growth.
"I am optimistic about growth and containment of inflation in the coming year," he told lawmakers. "If you wish me to sum up in one phrase the outlook for next financial year, I would say 'optimism,' but with caution as the watchword."
The Economic Survey is closely watched by markets for clues to what lies in the budget, due Friday.
The report called for allowing foreign companies to own 100 percent stakes in single-brand retailers, up from the 51 percent stakes that overseas owners are currently allowed to hold.
The move would not affect the likes of American's Wal-Mart Inc. or France's Carrefour SA, multi-brand retailers that are currently prohibited from opening their own stores by laws designed to protect India's millions of mom-and-pop shops.
Other suggested reforms included raising the foreign investment ceiling in insurance to 49 percent from 26 percent and opening coal mining to private companies.
The report said there was "heightened urgency" to upgrade the country's infrastructure, an investment that could top US$500 billion (