Warning of possible deterioration in the inflationary situation, which could stifle growth, the Reserve Bank of India?s (RBI) Industrial Outlook Survey expects a decline in the overall business & financial situation and exports, besides an increase in the prices of raw materials, compared to the first quarter of 2007-08. The survey forms part of RBI?s report on the Macroeconomic and Monetary Developments in 2007-08, released on Monday, a day before the central bank unveils its Annual Monetary Policy for 2008-09.
Bankers and economists said the survey results point to a tighter monetary policy by RBI on Tuesday, and a lower expectation of growth for FY09. Quoting Central Statistical Organisation (CSO) figures, the central bank said, CSO advance estimates place the real GDP growth rate at 8.7% in 2007-08 compared with 9.6% in 2006-07, reflecting growth moderation in all the three sectors?agriculture & allied activities, industry and services.
According to the Industrial Outlook Survey?conducted in February 2008 and involves manufacturing companies in the private sector?the business expectations indices, based on assessment for January-March & expectations for April-June 2008, increased by 6% and 3.9%, respectively over the previous quarters. But on a year-on-year basis, the indices declined by 3.8% and 3.4%, respectively.
