CMIE sees 6.3% growth

Despite concerns over the progress of the monsoon, the Centre for Monitoring Indian Economy (CMIE) on Thursday said the economy would grow at 6.3 per cent in 2004-05.

As projected in April 2004, the agriculture sector is expected to grow at 2.7 per cent, industry at 6.4 per cent, while the services sector would see a growth of 7.9 per cent in 2004-05, CMIE said in its monthly economic review.

"It (monsoon) failed in the fifth and sixth weeks and the cumulative precipitation till July 7, was 10 per cent below the long-term average," CMIE said.

A recovery in the next two weeks was crucial to ensure that the agricultural production was not adversely affected, it said, adding the farm sector growth in FY-05 was likely to be led by non-food grains.

The manufacturing industry had started to see the returns from investments and it was likely that these would sustain the risks associated with agriculture and monsoon, it added.

These (conducive conditions) would help to sustain the current growth of 6-7 per cent in the industrial production in FY-05. The trade, transport, hotels and communications sectors were expected to lead the growth in the services sector, CMIE said.