"Overall, we expect India's GDP to grow by 6.75 - 7 per cent during 2005-06," Subir Gokarn, chief economist, Crisil said at a post-Budget meeting in New Delhi. Crisil expects agriculture to grow by 3.5 per cent, industry by 7 per cent and services by 8.5 per cent next fiscal.
Referring to the budget proposal for boosting manufacturing and infrastructure sector, he said the industrial growth has been estimated higher at 7 per cent for the next fiscal.
On inflation, he said, "This budget will not have much impact on inflation." Also, the inflation scenario would be far more dependent on sectors like domestic capacity utilisation and global commodity prices, he said projecting 5-5.5 per cent inflation.
Crisil estimated a higher fiscal deficit of 4.5-4.7 per cent of GDP as against the budget target of 4.3 per cent. Gokarn said there might be revenue shortfall even though expenditure may be on target.
"Expenditure has been less this fiscal from the budgeted amount. Going by this trend, there is no risk in government meeting the fiscal deficit target of 2005-06," he said.
Expecting a hike in market borrowing by Rs 8,600-12,400 crore (Rs 86-124 billion) next fiscal, Gokarn said, "There may be a moderate hardening of interest rate. We expect the benchmark 10-year government papers yield at 7.25 per cent by the end of the next fiscal."