Reforms to drive India’s growth at 7.2 percent: Assocham


New Delhi: The Indian economy is expected to grow by 7.2 percent in the current fiscal, primarily driven by improvements in consumer sentiment, rural economy, and policy reforms, said an industry survey released here Thursday.

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According to the survey, conducted by the Associated Chambers of Commerce and Industry of India (Assocham), about 42 percent of the respondents believe policy reforms would cast massive impact on the GDP (gross domestic product) growth.

The chamber outlined eight major factors that impact economic growth most – policy reforms, consumer sentiments, money market conditions, rural development, performance of world economy, fiscal stimulus, investment announcement and government spending.

A majority of 83 percent of the respondents said that government would be able to bring significant reforms this year.

The findings of survey were shared by Assocham president Sajjan Jindal with Finance Minister Pranab Mukherjee at an informal meeting here, the chamber said.

The economy witnessed a serious dip in consumer confidence last fiscal, which was hit by global meltdown. However, the survey said the economic situation was getting better now.

About 91.7 percent of the participants believe there are good chances of improvement in consumer sentiments in coming months.

The survey also said the agriculture sector would likely grow around 4.6 percent in 2009-10 and the services sector 9.7 percent.

However, the poor state of the world economy and money market conditions remain the biggest challenge for India’s growth, the report said.

About 60 percent of the respondents felt that the behaviour of foreign institutional investors (FIIs) would be “favourable” towards Indian stock markets this year.