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Journalism of Courage
Following predictions by economists, some overseas rating agencies and UN’s body ESCAP, it is the National Council for Applied Economic Research (NCAER) which has projected a lower growth rate of GDP for the year 2004-05. NCAER on Monday, said that the economy was expected to grow at only 6.7 per cent growth in the year 2004-05 due to an all round deceleration in agriculture, industry and the services sector.
In its latest report, NCAER has also stated that the fiscal deficit of the Centre was expected to be 5.3 per cent of GDP. ‘‘The GDP is expected to grow by 6.7 per cent during 2004-05,’’ NCAER said. With an expected normal rainfall at the back of very high growth in the last year, NCAER has stated that agriculture would grow at 3.0 per cent in 2004-05 against their projection of 10.7 per cent for 2003-04. ‘‘This contraction in agricultural growth as compared to 2003-04 would lead to a reduction in overall demand as well. This would have impact on industry and services growth,’’ it said, reasoning that it was due to lack of demand.
Though the industrial sector was likely to be ‘‘buoyant’’ this year, the report said that ‘‘there would be deceleration in growth as compared to last year’’ and expected that industry would clock 6.8 per cent growth as compared to 7.5 per cent projected for 2003-04.
The relatively low growth in industry is mainly due to slack in demand as agricultural growth would decelerate substantially and ‘‘investment is supported by higher FDI, but it will also decelerate due to contraction in demand,’’ the report said.
NCAER said that the services sector was expected to slow down, but marginally, at 8.35 per cent growth in 2004-05 as compared to its projection of 8.39 per cent for the last fiscal. Inflation, which was expected to average 4.71 during 2003-04, is likely to be 4.3 per cent this fiscal, it said.
