New Delhi, July 27: The Confederation of Indian Industry (CII) has upped its growth forecast for the economy this year to 6.8 per cent from the earlier levels of 6-6.4 per cent.
Further, it forecast that the rate of inflation would rise to 5-5.5 per cent from the level of 3.4 per cent last year.
According to the growth forecast made by CII, factors contributing to higher estimation of the Indian economy includes abundant rainfall and industrial growth which is expected to be 6.5 per cent. The services sector is expected to grow at the rate of 7.5 per cent.
“Agricultural output may increase by anything between 4-5.5 per cent if rainfall remains as good as it has been so far,” predicts the forecast.
Omkar Goswami, chief economist of CII, said, “On the whole, industrial production grew by 5.7 per cent, while the manufacturing sector showed a 6 per cent growth in May this year.”
He, however, cautioned the industry not to worry about the slight dip in April and May, this year as the upswing that began around the middle of 2003 is poised to continue.
It is to be noted that despite the growth in industrial sector from 3.3 per cent in 2002 to 6.8 per cent this year, the headline GDP numbers have been disappointing due to poor performance of the agricultural sector.
Touching the issue of India's sunrise sector, telecom, Goswami said, “India has the seventh largest telecom network in the world which is growing at an accelerated rate.”
According to CII, the cellular subscriber base has grown at 103 per cent, increasing to 14.1 million in May 2003 from 6.9 million a year earlier.
Tariff cuts on domestic, long distance and international calls has led to encouraging growth in volumes.