New Delhi, Oct. 26 (PTI) Economic think tank National Council of Applied Economic Research (NCAER) has lowered its growth projections for the economy to 4.8 per cent for the current fiscal from the earlier estimated 5.5 per cent and warned that prices of agricultural products and food would harden to push up inflation by 5 per cent.
In its mid-year review of the economy, the NCAER cautioned that lack of growth in agriculture sector would push the prices but said, “The adverse impact of poor monsoon on the overall economy to some extent would be offset by government spending on drought relief.”
It, however, said the Centre’s gross fiscal deficit would be significantly more than the budget target of 4.5 per cent and was expected to be around 6.3 per cent.
The mid-year review of the economy, released by NCAER director general Suman Bery, attributed lower than the targeted economic growth coupled with higher government expenditure to the increase in fiscal deficit as a percentage of GDP.
However, industrial output was projected to rise by 5.6 per cent and relatively strong output growth of industry was mainly due to the higher government expenditure, some of it leading to higher public investment. The service sector has been projected to grow by 6.9 per cent.