Mumbai, Jan. 10: The Centre for Monitoring Indian Economy (CMIE) has raised the forecast for the real GDP growth this fiscal to 3.7 per cent from its initial estimates of 3.1 per cent. The revision has been prompted by a strong performance by the industrial and services sectors.
The industrial sector, which posted an impressive 6.3 per cent growth in the second quarter of the current fiscal due to a boom in construction and manufacturing, has performed well despite a sharp drop in agricultural production. CMIE had earlier brought down the real GDP estimate to 3.1 per cent from 4.5 per cent due to the drought.
In the January review of the Indian economy released here today, CMIE said that the services sector also grew by 7.6 per cent in the first half of this fiscal. Real GDP growth during the second quarter was 5.8 per cent and the third quarter ended December 2002 may record a near-zero growth in real GDP due to a fall in the agricultural sector.
The agency also lowered the estimates for agriculture due to the worse-than-expected performance in the Kharif season and the poor prospects of the Rabi crop. This is expected to shrink by 4.4 per cent against the earlier projection of 3.5 per cent.
The monitoring agency revised growth forecast in industry from 4 to 4.9 per cent and services from 6 to 7 per cent. It expects the current fiscal to end with a sharp 10 per cent decline in agricultural production. Foodgrains production would decline by 11 per cent implying a shortfall of 24 million tonnes.
Production of oilseeds was expected to fall by 18 per cent, cotton by 22 per cent and sugarcane by 5.4 per cent.
Foodgrains production in the Rabi season was projected to be 86.7 million tonnes while oilseeds was estimated at 6.95 million tonnes, which shows a fall of 3 per cent and 8 per cent respectively.
In October, the index of industrial production grew 6.2 per cent after having recorded similar or better growth rates in the last three months, CMIE said.