Double-digit growth requires more reforms

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lower than the 11.1% growth rate in the previous fiscal.

Agriculture sector, which generates a fifth of GDP but employs about 60% of the country’s population, was estimated to expand 2.6%, down from 3.8% in the previous fiscal. The deceleration of growth of agriculture sector is attributed to the slackening growth of the Rabi crop.

Among the booming services sector, trade, hotels, transport and communication activities are likely to expand by 12.1% from 11.8%. However, finance, real estate and business services are estimated to grow at 11.7% as against 13.9%.

Construction activities are projected to moderate to 9.6% as against 12%. Electricity, gas and water supply would be the only saving grace in the industrial activities as they are shown to be growing at 7.8% against 6%.

The Survey stated that slowdown in the US market would impact India but it was difficult to quantify its impact. It expected that one of the implications of the sub-prime crises would be increase in capital inflows.