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| CMIE revises GDP growth upward to 6 per cent |
| Press Trust of India / Mumbai Oct 15, 2009, 19:17 IST |
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Centre for Monitoring Indian Economy (CMIE) has revised its real GDP growth forecast for the current fiscal year to six per cent from 5.8 per cent.
"We have upward revised our real GDP growth forecast for the current fiscal year to 6 per cent from 5.8 per cent. This revision comes on account of a better-than-expected performance of the Index of Industrial Production and cargo movement at ports and railways," it said.
An increase in advance tax payments by corporates is also a clear indicator of an improvement in the economy, the city-based think-thank said in its monthly review here.
Since June 2009, the domestic economic situation has changed dramatically and the adverse impact of the global liquidity crisis has almost become history, it said.
"In June and July 2009, the performance of the manufacturing sector was much better than expected. The production index of the manufacturing sector grew by 7.8 per cent and 6.8 per cent, respectively, in these months."
CMIE expects this robust growth to continue in the remaining months of the current fiscal. The growth will be led by cement, automobiles and electricity segments.
Two factors that can hurt industrial growth are poor monsoon and slow bank credit take-off. Despite this the growth will exceed expectations. "As a result, we are revising the IIP growth forecast for 2009-10 to 5.8 per cent from 5.1 per cent."
The manufacturing sector's GDP is estimated to grow by 5.1 per cent in the quarter ended September. This is an improvement from the 3.4 per cent growth recorded in the first quarter of the current fiscal, CMIE said.
While, in third quarter growth is likely to accelerate to 6.1 per cent and further to 8.2 per cent in the fourth.
The upward revision in IIP will push up growth in GDP from the industrial sector to 6.5 per cent in 2009-10 from the 6 per cent projected earlier, it said.
On the agricultural sector, it said, "Agriculture and allied sector's GDP is projected to decline by 2.9 per cent in 2009-10. This is because of the failure of the southwest monsoon. This will the first fall in agricultural income in seven years."
Crop production in 2009-10 is projected to decline by 6.4 per cent. The sharp decline will be partially covered by a 4 per cent increase in income from livestock and fishing and 2 per cent from forestry and logging.
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