Well name - Snaiperskaya Vintovka Dragunova suggests that it is sniper rifle, but now it doesn't fall in same category. While more accurate M-14 DMR is designated marksman rifle.
SVD is custom designed sniper rifle.
M14 is a modified battle rifle.
M14 is only accurate with good ammo designed for the role... grab a hand full of the ammo from an M60 machine gun and watch how pitifully inaccurate an M14 can be.
The main problem with the SVD is that most people who "test" it are not using the correct ammo.
It wont blow the nuts off a fly at 600m but it is effective enough to hit an enemy soldier in the chest at that range and with heat treated AP ammo that is enough.
The SVDs handed out to platoons of troops in Motor rifle and tank brigades and divisions are used as designated marksman rifles and for that role they are just fine.
SVDs used by special forces for actual sniping missions are good enough for most tasks, though obviously for some missions a rifle that is more accurate might be more useful now that they are looking at shooting at targets at much longer range than previously anticipated.
There is no reason why the SVD could not be improved to be as good as if not even better than the M14, FN FAL or G3... or of sniper rifles based on them like the M21 and PSG-1.
The real issue is proper ammo... the Soviets already had an M14 like rifle... that was the Tokarev and they rejected the idea of using a modified battle rifle and chose to custom make one for a range of reasons.
Might I ask You why do you prefer FN FAL? Do You own it?
I find it very comfortable to fire, recoil is like a gentle straight push rather than the sharp kick from my Mosin rifles.
The only thing I don't like about my SLR is that the gas plug goes in two different ways, yet only actually works one way, so depending on how I put it back in when I clean it, I either get a second shot, or I have a straight pull manual bolt action...
It is a very long rifle but has a good balance and feel to it, though it is heavier than an SVD.
It is fairly straight forward to strip and clean... its tipping block mechanism reminds me a little of the SKS design.
First time I took of the butt stock I got smacked in the head by the main return spring, but otherwise it is a good rifle.
I hated AK4 (it is basicly G3). Long clunky almost impossible to control bursts. Never had them fitted with optics. Reliability was terrible, almost bad as with M-16.
I have heard good things about the G3... perhaps your government bought them "cheap" and got what they paid for. Here in NZ our Steyrs are Australian made... and don't tend to be as good as the originals made in Austria either.
Bursts in that calibre are not often rated for accuracy in rifles. Put a heavy barrel and a bipod and perhaps get some better performance but such use should only be recommended at very close range. BTW in the Falklands war the interesting situation of the British with their semi auto only L1A1s and the Argentines with their full auto capable FN FALs led to British soldiers taking the auto sears from the Argentine rifles to enable them to burst fire their L1A1s. Sounds like they found value in burst fire... especially in close quarters... but then often soldiers do things that seem right at the time but cold analysis after the event shows different.
I wish I could get my hand on a real SVD in the states.
Due to laws here in NZ you need a special licence category to own a real SVD, but an SVD with the muzzle brake removed and a 7 shot mag or smaller can be owned on a general licence... like this one below:
http://www.guncity.co.nz/7.62x54-xidg28211.html
(note suppressors are unregulated in NZ so you don't need a special licence to own the beast above...