The economy is slated to grow by 6.9 per cent in this fiscal backed by a robust 9.0 per cent growth in farm output, credit rating agency ICRA said on Monday.
"An excellent monsoon and a likely new record agricultural output, fiscal year 2003-04 appears set to clock growth well in excess of 6.5 per cent, perhaps approaching 6.9 per cent," ICRA said in its report Money & Finance to be released shortly.
Agreeing with former Reserve Bank Governor Bimal Jalan's views of gross domestic product growth in excess of 6.0 per cent, ICRA revised upward its own growth target to 6.9 from 6.0 per cent based on good monsoon followed by record harvest.
"The increase (in GDP) is contributed by a very sharp increase in agriculture GDP by as much as 9.0 per cent," the report said, referring to the decline of 3.1 per cent in farm output last fiscal.
ICRA not only estimated a record kharif crop at 110 million tonnes, along with better oilseeds, sugarcane and cotton output, but also predicted a record rabi harvest.
The rating agency, however, pegged growth of non-agriculture sector at 6.4 per cent with industry and services growing slower than what they did last fiscal.
While industry is slated to grow by 5.8 per cent this fiscal compared to 6.0 per cent in 2002-03, services sector is likely to post 6.7 per cent as against 7.1 per cent last fiscal, it said.
ICRA attributed the slower growth in industry to depressed growth in mining and quarrying, gas, electricity generation and water supply sectors.
With better corporate results and a surge in domestic and international demand, ICRA said, "It is most likely that manufacturing output growth will continue to be strong for the rest of the current fiscal."
Industrial growth would be somewhat dampened by the lower growth in electricity generation.
"Excellent monsoons this year made for a cooler summer and rain soaked fields -- hence less power demand for air-conditioners and irrigation pump sets. Some improvement in curbing power theft across the country has brought down the demand," ICRA said.
ICRA expected exports growth to come down to below 10 per cent from 22 per cent last fiscal.
