NCAER pegs GDP growth at 7.2 pc

NCAER in its latest economic update while projecting a more than 7 per cent Gross Domestic Product (GDP) growth rate has, however, expressed concern over the likely impact of stepped up public borrowing on availability of fund for private investment.

The think tank, which had forecast economic growth of 6.5-6.9 per cent for the current fiscal year, said the economic growth would get a boost due to revival of demand in economy as well as stepped up public spending on infrastructure development.

The economy, growth rate of which has been impacted due to ongoing global slowdown, posted a low growth rate of 6.7 per cent in 2008-09 compared to 9 per cent growth rate in the previous three fiscals.

As per NCAER’s projection services sector, which form more than 55 per cent of GDP, is likely to grow by 9.4 per cent in the current fiscal.

Agriculture growth is projected at One per cent, if the pick-up in monsoon sustains, according to the NCAER report.

Industry growth

Further, industry growth projection has also been revised upaward to 6.7 per cent as compared to 6.3 per cent.

The review noted the fact that the deceleration in industrial growth has been sharp in the financial year 2008-09 and the output performance of the sector has remained weak in the first two months of the current fiscal.

However, the industrial production is expected to recover in the first quarter of 2009-10 due to strong domestic demand, signs of recovery by global macro-economic indicators and stimulus packages of the government, the report further said.

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