CII expects 7.8 % growth in 2003-04, lower in next fiscal

Monday, 09 February 2004, 20:30 IST
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NEW DELHI: The Confederation of Indian Industry (CII) is optimistic of India notching a 7.8 percent gross domestic product (GDP) growth in 2003-04, but has forecast a dip in the next fiscal to 6.7 percent. The GDP growth touched 8.4 percent in the second quarter of 2003-04, the highest ever growth rate since 1997-98 when quarterly GDP data first became available. While in its previous quarterly report CII forecast a GDP growth of 7.2 percent for 2003-04, "in view of the strong performance in the services sector, we have raised our estimate to 7.8 percent," a report for October-December stated. Finance Minister Jaswant Singh, in his interim budget presented last week, had said India would notch a GDP growth of 7.5-8.0 percent this fiscal, up from 4.0 percent in the previous one, due to the impact of a failed monsoon. As against minus 3.2 percent agriculture growth in 2002-03, this year the CII is expecting a 8.2 percent growth. Similarly, in the industry sector, the expectations are of 6.5 percent growth, up from 6.0 percent. In services, the growth is expected to rise from 7.1 percent to 8.3 percent in the current fiscal, taking the GDP tally to 7.8 percent. "The performance of all three sectors - agriculture, industry and services - was strong, but growth in the services sector was significantly above trend," the CII pointed out. Despite the appreciation of rupee against dollar, Indian exports from April to December have managed to notch over 13 percent growth, the industry body stated. For 2004-05 fiscal, "CII's preliminary estimate for GDP growth is 6.7 percent", the report stated. This is because after a high 8.2 percent growth in agriculture this fiscal, the growth is expected to slow down "even with a good monsoon due to the impact of the above trend growth in the base year". Overall, the CII is optimistic of India benefiting from an upswing in the international growth with positive factors favouring growth currently far outweighing the risks. Given the expected benefits, CII does not rule out an upside for industrial growth in 2004-05 "depending on the extent to which investment spending picks up".
Source: IANS