Expressing optimism over the developments in the economy, Reserve Bank of India on Tuesday pegged the GDP growth for 2004-05 in the range of 6.5-7 per cent and said the country may continue to be among the top performers in GDP growth globally.
The Monetary and Credit Policy 2004-2005
"Real GDP growth for 2004-05 may be placed in the range of 6.5-7 per cent assuming sustained growth in the industrial sector, normal monsoon and good performance in exports," the central bank said in its annual policy statement in Mumbai.
The realisation of such a rate of growth would signify a structural acceleration in growth rate of economy, it said.
"With a normal monsoon, the growth in agriculture can be assumed to be at the trend growth rate of about three per cent and that the industry and services sectors maintain their current growth momentum, the real GDP growth during 2004-05 could be 6.5 per cent," it said.
The meteorological department in its forecast of south-west monsoon has predicted expected rainfall at 100 per cent of its long-term average.
The overall assessment of the developments during 2003-04 and the outlook for 2004-05 on a qualitative basis provide grounds for optimism, the central bank said.
In terms of GDP growth, India may continue to be among the top performers globally and the price situation is unlikely to cause concern to macro-stability though a very close watch is warranted, it said.
Credit delivery, in particular to agriculture, small and medium enterprises and infrastructure, is critical to sustain growth, RBI said, adding the financial sector exhibits growth strength, efficiency and stability.
The higher GDP growth of 8.1 per cent during 2003-04 against four per cent in the previous year reflects a rebound in agriculture production, it said, adding GDP from agri and allied activities is estimated to have risen by 9.1 per cent during 2003-04 against a decline of 5.2 per cent in the previous year.
The overall growth of the industrial sector at 6.6 per cent is also higher than 6.2 per cent in the previous year reflecting higher growth in manufacturing as well as electricity and gas, it said.
The services sector grew by 8.2 per cent as compared to 7.2 per cent in the previous year.