CMIE sees 9% GDP growth

The real gross domestic product (GDP) growth is likely to touch 9 per cent in 2003-04 because of a better than expected performance of the agricultural sector, according to the Centre for Monitoring Indian Economy (CMIE).

"The direct impact of incorporating a 14 per cent rise in agriculture in calculating growth will lead to a real GDP estimate of 9 per cent in 2003-04," CMIE said in its monthly review (March) released here yesterday.

The Central Statistical Organisation (CSO) has indicated a growth of 8.1 per cent for the current fiscal, which is broadly in line with the CMIE's growth estimate of 8.2 per cent.

However, it is likely that these estimates could be revised due to the second advance estimates of the agriculture ministry, according to which crop production will grow over 19.5 per cent as against the earlier estimate of 14 per cent, it added.

"If we incorporate the estimates contained in the second advance estimates, the agriculture sector will grow about 14 per cent in 2003-04 as against our earlier estimate of 10.7 per cent," the economic think-tank said.

Finance Minister Jaswant Singh had last month announced there was a 8.9 per cent GDP growth in the quarter ended December 2003.

The index for industrial production (IIP) grew 6.2 per cent in first three quarters of this fiscal. It is quite likely that the estimate could be revised upwards and in the remaining months the IIP will grow at a faster rate to end the fiscal with 6.5 per cent or even a little higher, CMIE added.

There are, however, some differences among research agencies over whether the high GDP growth is sustainable.

A couple of days ago, rating agency Icra warned that economic growth might dip to 6.4 per cent during 2004-05.