GDP to grow 6.6-6.7% this fiscal: NCAER
Press Trust of India
New Delhi, January 27, 2005
Economic think tank NCAER on Thursday projected a comfortable 6.6-6.7 per cent economic growth this fiscal but said revenue deficit seems a "bit out of control" and concern on inflation remains.
"Growth in 2004-05 will be 6.6-6.7 per cent, down from 8.2 per cent in 2003-04, and the fiscal deficit situation looks better at 4.2 per cent of GDP because of higher non-debt capital receipts under the debt swap scheme," NCAER said in its latest quarterly economic review.
Erratic monsoon put paid to hopes of another year of high agricultural growth, it said, adding foodgrain production is expected to be lower by 8.5 per cent at 194 million tonne than last year.
During the second quarter this fiscal, agriculture registered a negative growth of 0.8 per cent, but industry and services maintained momentum by growing at 8.1 per cent and 8.2 per cent, while the overall GDP growth was 6.6 per cent.
On the fiscal side, it said the performance was not very encouraging as far as achieving the targets fixed by Fiscal Responsibility and Budget Management Act were concerned as "revenue deficit seems to be a bit out of control".
"Fiscal deficit is expected to be 4.2 per cent of GDP and revenue deficit 3 per cent," it said, adding tax revenue is expected to fall short by Rs 9,600 crore and non-tax revenue by around Rs 7,400 crore.
Commending the RBI's steps to check inflation, it said though inflation has fallen below six per cent, market concerns have still not subsided. The RBI's stance to keep inflationary pressure under check by using those instruments that affect liquidity in banking system without directly raising the cost of borrowing have paid dividends, it said.
© HT Media Ltd. 2004.