CII Scales Up GDP Estimate To 7.2 PC

New Delhi, Nov 9: | Updated: Nov 10 2003, 05:30am hrs
The Confederation of Indian Industry (CII) has stepped up the gross domestic product (GDP) growth outlook to 7.2 per cent for 2003-04 from its earlier estimate of 6.5-6.8 per cent. The revision has been made in CIIs survey on the state of the economy study up to September 30.

This upward revision in growth to 7.2 per cent is due to excellent monsoon, higher expected foodgrain output and agricultural income, and significantly better performance of the industrial, manufacturing and service sectors, said CII chief economist Omkar Goswami.

The study predicts a 7.5 per cent growth in the agricultural sector which according to the chamber is not an optimistic one, given that there was a significant reduction in agricultural output because of the drought in 2002-03, and that the growth would be over a smaller base, a release said.

Indeed, given decent rains in winter, it is quite possible that agricultural growth could exceed 8 per cent, said Dr Goswami.

The industrial sector that comprises mining, manufacturing, electricity and construction, is expected to grow at 6.3 per cent during this fiscal, according to the study. Order books of companies in the manufacturing sector are more full than they have been in the last four years. First half revenues have been higher than before, profitability is up and there is a general sense of optimism, Dr Goswami said.

The services sector that accounts for half of the GDP, has been projected to grow at 7.5 per cent. During the past 10 years, the sector has maintained growth above 7 per cent.

According to the study, agriculture will contribute 1.8 per cent growth to the overall GDP (7.5 per cent growth multiplied by a weight of 24 per cent), industry 1.6 per cent, and services 3.75 per cent, making a total of 7.2 per cent. To sustain this excellent growth in the future, India needs to focus on accelerating the process of eco reforms and to concentrate on building infrastructure, said Dr Goswami.