Despite concerns over the progress of monsoon, the Centre for Monitoring Indian Economy on Thursday said the Indian economy would grow at 6.3 per cent in 2004-05.
As projected in April 2004, the agriculture sector is expected to grow at 2.7 per cent, industry at 6.4 per cent while services sector would see a growth of 7.9 per cent in 2004-05, CMIE said in its monthly economic review.
"We maintain the earlier projection of a 6.3 per cent growth in real gross domestic product in the current fiscal," the economic think-tank said.
"There is some anxiety over the progress of the monsoon. It (monsoon) failed in the fifth and sixth weeks and the cumulative precipitation till July 7 was 10 per cent below the long-term average," CMIE said.
A recovery in the next two weeks is crucial to ensure that agricultural production is not adversely affected, it said, adding farm sector growth in FY05 is likely to be led by non-food grains.
The manufacturing industry has started to see the returns from investments and it is likely that these would sustain the risks associated with agriculture and monsoon, it added.
These (conducive conditions) would help to sustain the current growth of 6-7 per cent in the industrial production in FY05. The trade, transport, hotels and communications sectors are expected to lead the growth in the services sector," CMIE said.