It has also revised the GDP growth in 1997-98 sharply downwards from 5.1 per cent to 4.5 per cent. The revision in growth estimates for 1997-98 is on account of the sharp downturn in the estimates of the agricultural production in the year. "Agricultural production has declined and growth in the industrial and services sectors has slowed down substantially," a CMIE release said.

Although it has revised its growth estimate for the current fiscal downwards CMIE forecasts for agriculture and industry have remained unchanged from those made in June. It has projected growth in agriculture at 1 per cent and industry at 4.5 per cent while the growth projections for the services sector have been pared from 7.3 to 6 per cent.

The CMIE has said that if the budgeted disinvestment programme is completed, the gross fiscaldeficit would be 6 per cent of the GDP.

According to CMIE, the 1998-99 balance of payments position is expected to be poor compared to the position in 1997-98. "Current account deficit is likely to increase, while the capital inflows are expected to be substantially lower," CMIE has said.

The average inflation rate, as measured by the wholesale price index (WPI), is projected to remain at around 8 per cent during the current fiscal, though the average consumer price index (CPI) is projected to be higher than ten per cent.

Revised estimates for the last fiscal indicate that the output in the agriculture sector declined by 4.5 per cent against the earlier estimate of about 3 per cent. The CMIE said that though the new index of industrial production with its new base year does improve the growth prospects for industry, these and the revised estimates for the services sector do not compensate for the fall in agriculture.

The CMIE said that the experience of the past two years indicates that a normalmonsoon is necessary but not sufficient condition for a good crop. Foodgrains production declined by nearly six million tonnes in 1997-98 -- the tenth consecutive year of normal monsoons. It is likely to remain as low as it was in 1997-98 during the current year as well, according to CMIE. The services sector, CMIE has said, is expected to slowdown in 1998-99 in response to the second consecutive year's slower growth in the commodities sector and the consistent decline in the financial sector. Fresh investment proposals declined by 39 per cent in the year ended July, 1998, as a result of which, industrial production has been growing at a slower pace compared to the previous year.