Press Trust of India
New Delhi, June 5:
High growth of the agriculture and industrial sectors are expected to catapult gross domestic product (GDP) growth to 7.2 per cent during 2005-06, a Confederation of Indian Industries (CII) study has said. Forecast of normal southwest monsoon and strong growth in commercial
bank credit to the farm sector could push agriculture growth to around three per cent during 2005-06 as against one per cent during the last fiscal year, it said. â€œFactors likely to yield higher growth in agriculture are, projection of normal southwest monsoon, an improvement in distribution of quality certified seeds, higher than targeted growth in commercial bank credit to agriculture and a favourable trend reversal in the gross capital formation in agriculture,â€ the apex trade body said.
CII, however, cautioned about some downside risks for industrial growth for the current fiscal even while forecasting a 8.1 per cent growth for the sector during 2005-06. It said a further slow down of infrastructure sectors whose growth fell to 4.4 per cent in 2004-05 from 6.2 per cent in 2003-04 will impose a real constraint on industrial performance. Secondly, the RBI projection for growth of non-food credit is 19 per cent for 2005-06, which is significantly lower than 26.5 per cent growth in 2004-05 and may result in lower investment demand by the private sector, the CII study said. However, the CII forcasts an overall GDP growth rate of 7.2 per cent during 2005-06.