Experts peg GDP growth at 6.9 pc

Economists, in a survey conducted by the Federation of Indian Commerce & Industry (Ficci) have suggested that the withdrawal of the stimulus measures should happen only in sectors which are showing strong growth.

“Leading economists, drawn mainly from the banking and financial sectors, have forecast the gross domestic product growth for 2009-10 at 6.9 per cent, with agriculture growing at a negative one per cent, industry by 8.5 per cent and services by 9 per cent,” the Ficci survey noted.

Based on responses made by the economists the survey said agriculture and allied activities would contract by two per cent in the third quarter due to the wide-spread droughts, and would be stagnant in the final quarter of the fiscal.

However, the survey predicts that the industrial growth would be above 10 per cent in the third and fourth quarters, while services would expand by 8.8 per cent in the third quarter and 9 per cent in the fourth quarter.  On continuation of fiscal stimulus in 2010-11 –– an issue that has generated a debate on the eve of presentation of the Budget 2010-11 the survey points to a broad consensus on continuation of fiscal stimulus.

While cautioning that “sudden withdrawal of stimulus would adversely affect growth trajectory,” the survey, however suggested that the  government may look at withdrawal of stimulus in sectors which are showing good performance.

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