Propelled by double-digit growth in agriculture, NCAER on Wednesday forecast a higher 8.13 per cent growth for 2003-04, but warned that fiscal deficit would shoot up to 6.1 per cent of GDP due to increased government expenditure and surging inflation.
"On the assumption that agriculture output will grow by 10.7 per cent, GDP growth is expected to reach 8.13 per cent this fiscal," NCAER said in its latest quarterly review, revising upwards its earlier projection of 6.98 per cent.
The forecast is higher than Reserve Bank of India's "conservative" estimate of 7 per cent growth with an upward bias.
The economic think-tank said the overall assessment of the economy was one of robust growth with impetus coming from agriculture and industry, while services were expected to broadly follow the previous year's growth pattern.
NCAER warned that fiscal deficit was expected to shoot up to 6.1 per cent of GDP in 2003-04 against the budget forecast of 5.96 per cent. However, Centre had asserted it would be contained despite the sops given earlier this month.
"The higher fiscal deficit is on account of higher government consumption expenditure and rising inflation," it said. However, the review expects wholesale price index inflation, now at 6.21 per cent, to fall to 4.7 per cent in 2003-04.
Painting a rosy picture for the industrial sector, NCAER said it was expected to grow at 7.5 per cent due to higher investment demand and increased demand from the agriculture segment.