New Delhi: On a day when the government revised its economic growth forecast to 8.75% for the current fiscal, ratings firm Crisil also said the country’s GDP is likely to grow by 8.6%, up from its previous expectation of 8.2%.
“Crisil has revised India’s growth forecast upwards to 8.6% for 2010-11 in view of the economy’s strong performance in the first two quarters of 2010-11, as shown by the recent CSO release,” the ratings agency said in a statement.
Crisil has earlier put its growth forecast for the country during this fiscal at 8.2%.
Its revision came on a day when the government said the growth rate could cross 9% in the current fiscal itself and revert to the pre-crisis levels.
In its Mid-year Economic Analysis, the government estimated that growth in 2010-11 will be 8.75% with 0.35% variation on either side.
Having grown by over 9% in three years in a row, the economic growth rate slipped to 6.7% in 2008-09 on account of global financial meltdown.
The growth rate, however, picked up to 7.4% in 2009-10 as a result of stimulus provided by the government and the Reserve Bank of India.
The economy, according to earlier estimates, was expected to grow by 8.5% in the current fiscal rising to the pre-crisis level of 9% in the next fiscal.
Crisil said that during 2010-11, growth in agriculture is likely to grow by 5%, while industry and services are expected to register an increase of 8.6% and 9.4%, respectively.
According to it, robust farm production this year is aiding recovery and also reining in inflation.
“We have upgraded our GDP growth forecast to 8.6 per cent for 2010-11, based on our expectations of 8.4% growth in private consumption. The internal rebalancing of growth in India now seems to be complete...,” Crisil chief economist D K Joshi said.
The agency, however, said that industrial growth is expected to decelerate to 7.3% in the second half from 10.1% in the first half of 2010-11.
“Despite this the average industrial growth for the year, at 8.6%, will remain above the long-term trend,” it said, adding that the currentaccount deficit (CAD) forecast has been raised to 3.3% of the GDP for 2010-11.
Regarding inflation, the ratings agency said that fall in food inflation will pull down the overall inflation to 6% by March 2011.
Manwhile, the Analysis said that inflation has started coming down and is placed at 8.6% in October this year compared to 11% witnessed in April 2010.
“I am hoping that inflation will come down to 6% by March 2011,” Mukherjee told reporters after tabling the report in Parliament.
The Finance Minister said the report has been rechristened Mid-Year Economic Analysis from Mid-Year Economic Review as the new name has wider connotation. “Earlier, the term was review but this time we have chosen the term analysis as it gives us a broader space,” he said.