Credit rating agency ICRA on Monday revised upwards its economic growth projection to 6.5-6.7 per cent following Budget announcements that are likely to boost investment in agriculture and manufacturing sectors.
While ruling out over 7.0 per cent growth this fiscal, ICRA said the country can tick 7.2-7.7 per cent GDP growth in medium term if the United Progressive Alliance government is able to implement policies of stepping up investment, infrastructure development, further liberalisation of trade and reducing fiscal deficit.
"GDP growth for 2004-05 would most likely be around 6.6 per cent, give or take 0.1 percentage points," ICRA said in its Money & Finance report to be released shortly.
Earlier, ICRA had projected 6.4 per cent growth for this fiscal assuming a 1.7 per cent growth in agriculture, 7.8 per cent growth in industry and services sectors taken together.
But now, ICRA pointed out that agriculture can grow higher than 1.7 per cent while industry and services sectors can sustain 8.0 per cent, which would result in 6.6 per cent GDP growth.
"Indications for South-West monsoon are good so far and it is possible that agriculture will grow somewhat, especially given the government's initiative in pushing credit for purchase of inputs," it said.
Since, some of the agriculture estimates like foodgrain production has been scaled down from 212.8 million tonnes to 210.8 MT in 2003-04, ICRA said, "So it is possible to envisage a little more growth in agriculture output in 2004-05."
However, it said, "It would be an extra-ordinary achievement to realise 7.0 per cent growth this year on the strength of higher agricultural growth alone."