Mumbai, Oct 11: The growth in real GDP is likely to be 5.8 per cent in 2000-01, according to Centre for Monitoring Indian Economy (CMIE). The real GDP grew by 6.4 per cent growth in 1999-00. The current forecast also reflects a substantial scaling down of the seven per cent forecast made by CMIE in July 2000. An unusually dry monsoon spell in September and the steep hike in petroleum prices in the same month are the two principal reasons for the sharp revision in the growth estimates.The dry monsoon spell has marred prospects of a recovery in the agricultural sector during the current year. The previous year had seen a nearly two per cent fall in agricultural output. This year, CMIE estimates that output would be limited to 1.3 per cent as against the earlier expectation of 4.2 per cent growth. Oilseeds, rice and sugarcane are the major crops seriosly adversely affected.
The decline in agricultural growth and the steep hike in petroleum prices would affect industrial growth. Prices of petroleum products have been increased by 66 per cent during the past 12 months. Industrial production was expected to increase by about seven per cent by earlier estimates. However, the decline in domestic consumption demand following the poor rains and the steep hike in petroleum products would limit the growth to less than six per cent. Chemicals, transport and cement are the worst affected industries.
Investment continues to remain sluggish. Given the slowdown in consumption demand, it is unlikely that investments would pick up in the near future. The services sector, which has been the only one to maintain impressive growth in recent years, slowed down during the first quarter of the current year.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.