NCAER cuts GDP estimates to 6.7% for current fiscal

City-based economic think-tank NCAER today slashed the country's GDP projection for the current fiscal to 6.7 per cent, down from 7.6 per cent estimated earlier.
    
"The overall GDP growth is projected to decline by 0.9 percentage points in 2008-09, compared to projection made in October 2008," it said in its quarterly review.
    
The downward revision is essentially due to the fall in the pace of private expenditure on investment and consumption, it said, adding, however, there would be some improvement in the next fiscal (2009-10) with the growth expected to be marginally better at 6.9 per cent.
    
Yesterday, International Monetary Fund revised growth prospects for the Indian economy to 5.1 per cent in 2009 against its earlier forecast of 6.3 per cent at a time when the world economy is set to grow at 0.5 per cent, the lowest rate since World War II.
    
The forecast comes barely a week after Prime Minister's economic panel scaled down projections for economic growth to 7.1 per cent from earlier estimates of 7.7 per cent as India makes painful adjustments to "deeper than anticipated" recession in the industrialised world.
    
Even the Reserve Bank slashed the forecast at 7 per cent against 7.5-8 per cent projected in the October review.
    
NCAER said the fiscal stimulus and the monetary easing may have some positive impact on aggregate demand but it will have adverse impact on the fiscal balance of the central government.