Fiscal 1998-99 ended on a happier note than anticipated throughout the year and 1999-2000 begins on a note of some optimism, CMIE said in its March-April review of the Indian economy.

Thanks to a substantial increase shown in estimates released by the Union agriculture ministry, agriculture is estimated to have grown by an impressive 6.8 per cent during 1998-99 as against the 5.4 per cent decline recorded in the preceding year.

However, the industrial sector continues to languish in low growth rates -- amongst the lowest in several years.

A careful study of individual industry groups indicates that while a substantial rise in domestic consumption demand would push up production of consumer goods, investments would continue to suffer low or negative growth rates, the private think tanksaid.

Yet industrial growth in 1999-2000 would be higher at about 6 per cent against 4 per cent growth recorded in 1998-99. Growth of the services sector is expected to pick up in 1999-2000 to 8 per cent from 6.5 per cent in 1998-99, it said.

The high agricultural growth in 1998-99 is essentially a recovery from a decline in the preceding year. It is thus unlikely that such a high growth rate can be sustained in the following year, the CMIE said.

A long-term trend of agricultural growth indicates that the growth in 1999-2000 would be around 2 per cent, it stated.