New Delhi, December 10:

Indian economy’s buoyant performance in the first half of the current fiscal has led the Confederation of Indian Industry (CII) to raise its growth forecast to 8.6 per cent from eight per cent projected earlier — and the growth prospects will be largely insulated from the current global slowdown.

In its latest State of the Economy (SoE) quarterly bulletin issued today, the leading industry lobby has stated that India recording 9.1 per cent economic growth in the first half of 2006-07 has “set the stage for GDP crossing 8.6 per cent growth mark for the current fiscal”. CII has pointed out that industry and services sector have both grown much faster than expected in the first two quarters.

During the first half (H1) of 2006-07 fiscal, industry recorded a growth of 10.3 per cent while services grew by 10.9 per cent. In both cases the growth was higher than corresponding performance of 7.8 per cent and 10.3 per cent, respectively, in the previous year. “However, at 1.7 per cent growth in Q2, agriculture is a dampener,” states CII. It has expressed optimism that in the second half (H2) of the fiscal ending March 31, industry is likely to improve its performance from 8.5 per cent to 9.1 per cent. But services may witness a slight slowdown to 9.7 per cent from 10.2 per cent of H2 2005-06.

The net result is likely to be a slight decline in the gro-wth to 8.2 per cent during H2 2006-07 compared to 8.4 per cent previous year, states the report. “Despite the likely slowdown in the H2 performance, the growth performance is likely to be better.”