Ficci projects economy will grow at 5.6 percent

India's GDP will grow at 5.6 percent during 2014-15 and economic activity is expected to continue with this momentum in the second half of the current fiscal, Ficci said Sunday.

"The new government guided by the objective of restoring growth and governance has given very positive policy signals in its first 100 days. We see the confidence amongst investors slowly returning and hope that going ahead, the momentum on implementation front will build up," said the Federation of Indian Chambers of Commerce and Industry's (Ficci) latest Economic Outlook Survey.

While agricultural growth is expected to remain steady despite a delay in monsoon, the industrial sector is expected to grow by 4.7 percent in 2014-15 fiscal.

This is 1.6 percentage points more than the growth estimate in the previous survey round conducted in June 2014, the chamber said.

Retail inflation is expected at 7.8 percent this fiscal, in sync with the Reserve Bank of India's (RBI) target indicated earlier this year.

The economists who participated in the survey also felt that the RBI will consider a cut in policy rates only in the first quarter of the next calendar year.

The RBI will wait and watch until there were definite signs of inflationary pressure abating, they said.

The minimum and maximum range for GDP growth in the current fiscal is indicated at 5.3 and 6 percent respectively, as against 5.3 estimated in the previous round, reflecting optimism, Ficci said.

The projection by the economists regarding exports and the current account deficit (CAD) reflected no imminent risks. The CAD to GDP ratio for the fiscal was projected at 1.9 percent.

The economists also identified some priority areas for the government like developing a world-class infrastructure, ensuring uninterrupted power supply, resolving labour issues and minimising procedural hassles and fast-tracking approvals.