NEW DELHI, FEB 25: Leading trade and industry chambers have made conflicting forecasts about economic growth during the current financial year. While Federation of Indian Chambers of Commerce and Industry (FICCI) was sceptical about growth estimates of Central Statistical Organisation (CSO) at five per cent, Confederation of Indian Industry (CII) was more optimistic about growth prospects than the government's statistical wing itself.``It will be difficult to achieve even a five per cent GDP growth rate this fiscal as the performance of agriculture and industry sectors is dismal,'' a FICCI spokesman said. On the other hand, CII deputy director general Manushi Roy said that the GDP growth will be well over five per cent and may almost touch six per cent.
According to advance estimates of CSO released on Monday, the national income is likely to touch Rs 3,11,828 crore this year compared to Rs 2,96,845 crore achieved in 1997. Roy said the chamber expected the industry to do better after a revival inmanufacturing sector growth in the months of February and March.
Associated Chambers of Commerce and Industry (Assocham) secretary general, V Raghuraman, called for a change in ``gloom-doom'' scenario through improved public expenditure.
Raghuraman also called for measures to reverse the sagging business confidence, proper management of exchange rate, giving greater impetus to agriculture and putting proper infrastructure policies in place.
FICCI said the demand profile had been considerably constrained due to the negative agriculture growth, adding that the only silver lining was the improved share of services in the economy. Roy said, despite the unleashing of reforms seven years ago the agriculture sector had not received adequate attention. There were still a lot of controls regarding pricing, input management and licensing apart from domination by archaic food laws, she said.Raghuraman said the urban-rural divide could be bridged only throgh proper encouragement to agriculture and called forlinking the food chain so farmers could benefit directly.
All the three chambers expressed hope that the new government at the Centre would take adequate measures to kickstart the economy and initiate steps to alleviate poverty and reduce unemployment. Suresh Tendulkar of Delhi School of Economics said unseasonal rains this year might have brought down the growth estimates in agriculture sector, which was expected to slide to be a negative two per cent from over seven per cent last year. Tendulkar, however, said five per cent GDP growth estimate cannot be a worrying point as not too long ago the country was satisfied with an economic growth of just over three per cent.
Jayati Ghosh of Jawaharlal Nehru University said lower agriculture growth was on the cards due to seasonal factors but expressed surprise over the CSO estimate of achieving 5.7 per cent industrial growth. ``It is too evident that the industry is passing through a recessionary phase,'' she said. FICCI said the industrial growth estimateway out as the first eight months recorded just 5.1 per cent growth rate. Ashok Gulati of NCAER said the CSO esimates in the last couple of years have proved incredible as substantial changes were brought about to its first and final estimates.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
