RBI hikes GDP growth projection to 7-7.5%

The Reserve Bank of India (RBI) today hiked its gross domestic product (GDP) growth  projection to 7-7.5% from the earlier level of 7% for 2005-06 based on the current assessment of a pick-up in farm output and momentum in industrial and services sectors.

RBI is expecting kharif output to increase from the previous year's level. "In addition, the improvement in water storage levels over the previous year augurs well for the outlook on rabi production," it said while releasing the busy season credit policy.

The central bank said prospects for sustained growth in industrial output have improved due to rising investment and export demand, strong corporate profitability and buoyant business confidence.