Growth to drop in ’04-05: CMIE

India's economic growth will slow down in the financial year 2004-05. Agreeing with the Moody’s forecast of a slowdown, the Centre for ...

India’s economic growth will slow down in the financial year 2004-05. Agreeing with the Moody’s forecast of a slowdown, the Centre for Monitoring Indian Economy, a leading economic think tank, said on Monday the Indian economy would expand at 6.3 per cent in the financial year to March 2005 on the back of robust growth in the industry and services sectors.

This slowdown comes after a steep rise in 2003-04. CMIE also raised the economic growth forecast for the financial year to March 2004 to 8.7 per cent, from the 8.2 per cent it had forecast in January. Moody’s had earlier said the growth will decline to 6.5 per cent next year.

Aided by abundant agriculture production in FY-04 and rise in consumer spending, the CMIE predicted a growth of Indian economy at 7.5 per cent for the first quarter of 2004-05.

Story continues below this ad

The real growth in GDP for 2003-04 was around 8.7 per cent with 10.2 per cent in Q4, CMIE said in its monthly economic review. ‘‘The real gross domestic product (GDP) grew at 8.7 per cent in 2003-04. Farm production in 2003-04 is expected to give rich dividends in the early FY-05 and cash income available with farmers would spur consumer spending in Q1,’’ it said.

‘‘We therefore, expect the growth in the first quarter to be roubust at around 7.5 per cent. This is likely to slowdown to six per cent in Q2 and then to less than five per cent in Q3 and about 5.5 per cent in Q4,’’ the CMIE said. Electioneering is also expected to contribute to the rise in consumer spending in the first quarter, it said. ‘‘The impact of rise in the consumer spending would spread across manufacturing consumer goods and services sector. The index of industrial production is likely to grow at 6.5 per cent in 2004-05,’’ it said.

The growth in the manufacturing sector would be aided by a rise in domestic demand and continuation of strong global commodity prices, it said. The services sector is projected to grow at 7.9 per cent, agriculture at 2.7 per cent and industry at 6.4 per cent, as a consequence the real GDP of the country would grow at 6.3 per cent in 2004-05.

On the growth trends in 2004-05, CMIE said the growth in services sector would be concentrated in the trade, hotels, transport and communications. After a long lull, the investment demand would pick up in the current fiscal. The rise in the domestic demand would get philip in FY-05 as many investment projects announced in 2003-04 would be implemented in the current year, it said.

Story continues below this ad

Commenting on the industrial growth in 2003-04, the CMIE said, the index of industrial production (IIP) has accelerated from November 2003 and is expected to clock seven per cent growth in 2003-04.

India dismisses NATO chief’s claim of ‘Delhi now on phone with Moscow’ as ‘baseless’

India7 min ago

India denies NATO chief's claim that US tariffs on Russian oil are pushing PM Modi to seek clarification from Putin on Ukraine strategy. MEA calls statement "factually incorrect and baseless," urges NATO to take more responsibility. Trump's tariffs on India have led to Modi seeking clarification from Putin, says Rutte. Modi and Putin have discussed resolving the conflict peacefully.

View all shorts

Live Blog

PHOTOS