CMIE raises GDP growth estimate

CMIE also revised its estimate for the decline in the agriculture sector during 1999-2000. It said agriculture will decline by 1.0 per cent, against earlier estimates of a 1.2 per cent fall.

The index for industrial production (IIP) grew 4.0 per cent in 1998/99, agriculture expanded 7.2 per cent while the services sector grew by 8.3 per cent. Agricultural production, by weight, will fall 3.1 per cent in 1999-2000 compared with the growth of 8.2 per cent the previous year, it said.

"During the first three quarters, agriculture witnessed a 1.2 per cent growth. An expected decline in agricultural growth during the fourth quarter is likely to pull down GDP growth in 1999-2000," the report said. "The manufacturing and electricity sectors are poised torecord seven per cent growth each," it said.

CMIE lowered its estimate for the inflation rate in 1999-2000 measured by the wholesale price index to 3.0 per cent from earlier projections of 3.5 per cent. WPI inflation was 6.9 per cent in 1998-99. "Adequate supply of goods, slowdown in domestic consumption demand after depressed growth in agricultural incomes and lower money supply growth have all contributed to a low rate of inflation," the report said. It maintained estimates for the current account deficit last year at 1.2 per cent of GDP and projected net foreign capital inflow during 1999-2000 at $9.1 billion.