NEW DELHI - Suggesting some sweeping reforms in areas like foreign direct investment, divestment, taxation and the subsidy regime, India’s Economic Survey says the country can achieve 7.75 percent growth this year despite the difficult global circumstances.

The economy can even expand much higher than last year’s growth if the monsoon rains were normal, said the country’s annual economic report card for 2008-09 tabled in parliament Thursday by Finance Minister Pranab Mukherjee.

“If the US economy bottoms out by September 2009 there would be good possibility for the Indian economy repeating its 2008-09 performance,” it said, adding, even as wide ranging challenges remained, the Indian economy had shock absorbers to facilitate early revival.

The $1.2 trillion Indian economy expanded by 6.7 percent last fiscal, after registering a 9 percent average growth in the preceding three years.

The survey, tabled annually ahead of the national budget and prepared by chief economic advisor in the finance ministry, presents an overall view of the state of the economy and gives some suggestions on the future course of action.

The survey, which wants restoration of high growth with price stability, has also called for limiting subsidies such as those doled out on fertilisers and cooking gas, while asking for a review of exemptions granted to exporters.

The survey says government must also take a thorough re-look at its divestment policy and target to realise 25,000 crore per annum ($5 billion) from the sale of at least 10-percent equity in government-owned enterprises.

Further, it has suggested the auction of loss-making state-run enterprises.

In the case of excise, customs and taxation, the survey calls for a new income tax code, rationalisation of double taxation, phasing out of surcharges, removal of fringe benefit tax and withdrawal of dividend tax.

In the area of external reforms, the survey wants the government to allow 49 percent foreign equity in defence production, 100 percent in high-technology defence equipment and permission for global firms in multi-brand retailing.

The survey also appeared to have taken notice of the controversies surrounding the allocation of radio frequencies to telecom companies and has suggested auction of spectrum and make it freely tradable among the operators.

The survey says to counter the negative fallout of the global slowdown, India the Government responded by providing substantial fiscal expansion in the form of tax relief to boost demand and increased expenditure on public assets.