'India's GDP to grow at 9.5% in FY 09'

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Mumbai, June 16: : India's real GDP is expected to grow at an impressive 9.5 per cent in FY 09, the Centre for Monitoring Indian Economy (CMIE) said in its monthly review in Mumbai.

The Indian economy is heading towards the fourth consecutive year of an over-9 per cent growth and like in the last five years, growth this year too was expected to be driven by capital investments happening in India, CMIE said.

As per CMIE CapEx Service, projects worth Rs 3.4 lakh-crore are scheduled for commissioning in FY 09. This would be the highest-ever completion of investments in the Indian history, CMIE said.

The capital investment boom in the country drives the current growth phase of the Indian economy.

India's GDP started rising by over eight per cent since FY 04. And, the gross capital formation (GSF) grew in the range of 13-23 per cent during this period.

CMIE expects growth in GSF to accelerate to 18.7 per cent in FY 09 from 13.4 per cent in FY 08. This robust growth in GSF is expected to more than offset the moderation in the growth in private final consumption expenditure (PFCE) and Government final consumption expenditure (GFCE).

CMIE stated that the PFCE is expected to grow by five per cent in FY 09, after growing by 7-9 per cent in the preceding three years. While the slower growth in the PFCE would mainly be on account of the higher base in 2007, the prevailing high inflation would also affect the consumption demand to some extent.