GDP growth to be lower at 5.8%: CMIE

GDP growth to be lower at 5.8%: CMIE
The Economic Times, July 17, 2009 Page 8

PTI MUMBAI

ECONOMIC think tank, Centre for Monitoring Indian Economy (CMIE), has lowered India’s real GDP growth figure to 5.8% from the earlier expectation of 6.6% as monsoon played truant in June.

“India’s real GDP is expected to grow by 5.8% in FY10,” CMIE said in its monthly review here. The revision is entirely because of the failure of the monsoon in June, CMIE said.

While the Union Budget for 2009-10 was expansionary and conducive to growth, the delayed monsoon and the consequent 4.7% decline in agriculture is expected to shave off 0.8% from the GDP growth rate. At 5.8%, India is still among the very few countries in the world with a respectable growth rate, it said. This growth rate remains respectable in spite of two consecutive external shocks within less than ten months of the global liquidity crisis in September and the failure of the monsoon in June. The growth rate is a reflection of the resilience of the Indian economy and its strong fundamentals before the crisis struck in late 2008, CMIE said.

Indian economy grew at a slow pace of 6.7% in 2008-09 against a rate of 9% in the preceding four years. CMIE said the ongoing industrial recovery will also be impacted and projected the industrial production growth at 4.8% in the current fiscal against 5.1% projected earlier. “Nevertheless, this growth rate is significantly higher than the 2.4% growth registered in 2008-09,” it said.