India's economy is likely to grow by 6-6.2% in the current fiscal, lower than 6.5% in 2011-12 which itself was the slowest in nine years, according to a survey of economists and industry leaders.
Continuing slowdown in the industrial growth and its spillover effect on the service sector, deficit monsoon and worsening global environment are expected to drag the GDP (Gross Domestic Product) lower in the fiscal 2012-13, an Assocham survey of economists and industry leaders indicated.
Indian economy had slowed to 6.5%, the nine-year low, in 2011-12, as per the official data.
The Assocham projections are also lower than the outlook of 6.5% by the Reserve Bank.
Planning Commission Deputy Chairman Montek Singh Ahluwalia also said that the GDP growth this year may be close to six%.
The industry body's survey conducted among 110 senior industry leaders and economists also cautioned that the prospects may further worsen if some of the policy issues are not immediately addressed.
Almost 80% of the economists covered in the survey, said the government has to create a fiscal space for significantly raising its capital expenditures so that the economy gets an investment booster. This can be done by removing untargeted subsidy bill. The private sector will follow as a spin-off, they said.
As the overall business confidence has further eroded in the first quarter of the current fiscal, the outlook survey indicated that the gross domestic product may grow even slower than the RBI's lower projections of 6.5% as the risks have increased on several counts.
Significant deficiency in monsoon has added to the problems. The prospects of growth in agricultural sector are dismal.
In fact, the agriculture sector which grew at about 2.5% in 2011-12 may not show any growth this year since sowing of the khariff crops, the main stay of the sector, has been affected.
It said industrial expansion at best could be just about 4-4.5% for the year while the services sector, the major contributor to the GDP is also showing signs of weakness. Mining is at a near standstill due to inadequate regulatory environment and manufacturing is at low ebb.