Lower 6.7 percent GDP growth in 2004-05: NCAER

Tuesday, 20 April 2004, 19:30 IST
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NEW DELHI: Despite expectations of a normal monsoon, India is expected to clock lower gross domestic product (GDP) growth of 6.7 percent in 2004-05 against 8.13 percent in the previous fiscal. The lower growth is pegged on an expected contraction in the agriculture growth from 10.7 percent in 2003-04 to three percent in 2004-05, said leading think tank National Council for Applied Economic Research (NCAER). "This contraction in agricultural growth as compared to 2003-04 would lead to a reduction in overall demand as well," said NCAER in its forecast issued Monday. The forecast tallies with the UN expectations of Indian clocking a lower six to seven percent growth this year. The lower agricultural growth is expected to "lead to a reduction in overall demand as well. This would have an impact on industry and services growth," according to NCAER. Though the industrial sector was likely to be "buoyant" this year, the think tank feels there would be a deceleration in growth from 7.5 in 2003-04 to 6.8 percent in the current fiscal. "Relatively low growth in industry is mainly due to demand contraction as agricultural growth decelerates substantially. Investment is supported by higher foreign direct investment, but it will also decelerate due to lower demand," the
Source: IANS
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