However, investments are expected to be sluggish through the current fiscal, independent of the political upheavals at the Centre, CMIE has said in its monthly review of the Indian economy of May, 1999.

A bumper wheat crop of 70.6 million tonnes along with a better estimate of 84 million tonnes of rice output has put the foodgrain production at nearly 201 million tonnes in 1998-99, CMIE said.

Inflation based on wholesale price index (WPI) has declined to 3.92 per cent, mainly due to the fall in the prices of primary articles. Exports have recorded a positive growth for the fifth consecutive month in March and grew by two per cent in that month, according to the CMIE review.

The overall balance of payments (BoP) position has remained strong despite thesurge in trade deficit to $8.2 billion in 1998-99 from $6.8 billion in the previous fiscal, due to the rise in forex reserves to $29.5 billion in 1998-99 from $25.9 billion in 1997-98, it said.

Overall, industrial sector has continued its tardy pace, CMIE said, adding, however, the manufacturing segment has shown an uptrend by registering the highest growth of 6.6 per cent in the last 11 months in February.

Cement, cotton textiles, two-wheelers and passenger cars were showing signs of recovery, while the consumer goods sector had, however, continued to trail behind, the CMIE review said. The capital goods sector has clocked a double-digit growth in the first 11 months of 1998-99, it said, adding such growth was witnessed only once earlier in the decade.

In the money and banking sector, broad money supply (M3) grew by 18 per cent while deposits with scheduled commercial banks (SCB) grew by 18.5 per cent during the fiscal under review.

CMIE said non-food credit grew by 12 per cent and SCB support to thecommercial sector was up by 16 per cent in the last fiscal. Statutory liquidity ratio (SLR) investments also increased by 16 per cent.

In the energy and infrastructure sector, coal production was lower by 3.9 per cent during march 1999 compared to 11 per cent and eight per cent declines in the previous two months of the calendar year. Electricity generation has, however, showed a rise of six per cent in March spurred by the high growth witnessed in thermal generation.

Fiscal 1998-99 reflected a 6.6 per cent growth in power generation, while oil production showed a decline of three per cent. Consumption of petroleum products witnessed a spurt in the last quarter of 1998-99 and refinery output expanded by five per cent.