CMIE pegs GDP growth at 6.6% for 2009-10

The Indian economy is likely to grow at 6.6 per cent in the current fiscal on the back of new investment proposals and additional capacity building by companies, economic think-tank CMIE said in a report.

The real GDP is projected to grow at 6.6 per cent in 2009-10, the Centre for Monitoring Indian Economy (CMIE) in said in a report on the state of economy today.

The projection is tad higher than the 6.5 per cent growth estimated in the last fiscal, the report said, adding, "There is some evidence that suggest that the much higher growth trajectory is getting restored after a sudden and substantial interruption."

The Reserve Bank of India has pegged GDP to grow at 6 per cent for the current fiscal in its monetary policy, announced on April 21, 2009.

According to CMIE, early results of the companies for the quarter ended March 09 are turning to be better than expectations.

"New investment proposals continued to pour in and companies have expressed confidence that they would set up additional larger production capacities during the fiscal," the report said.

The domestic demand is intact and is likely to prove itself resilient to the global turmoil seen in the second-half of 2008-09, the CMIE said.

However, it forecast the real GDP to grow modestly in the year on account of the difficulties of the Western economies, which continue to exert pressure on India's export-led industries on its trade and transport sector, it said.

A new source of anxiety, though relatively mild, is the Met Department's forecast of near-normal rainfall, the CMIE report said.

"This implies a lower precipitation during monsoon 2009. However, the possible damage from this prognosis will be limited," it added.