By IANS,
Mumbai : A study based on a survey conducted by India’s central bank has lowered the country’s economic growth forecast to 5.7 percent for this fiscal from the earlier projection of 6 percent because of a sharp downward revision in the anticipated expansion of industrial output.
The study, conducted on the basis of a survey among 17 professional forecasters, has kept unchanged the growth rate for the farm sector and the services industry at 3 percent and 7.5 percent, respectively, as per a statement issued by the Reserve Bank of India (RBI) Thursday.
The signs were ominous even in the case of merchandise exports, with the survey projecting a 4 percent dip to $169 billion – sharply lower than the target of $200 billion set by the commerce and industry ministry.
The survey also indicates a drop in savings rate and capital formation – which are essential for the country to invest in productive areas like infrastructure.
While the savings rate is seen falling to 34.6 percent from 35.3 percent, capital formation is forecast to drop to 32 percent from 37.5 percent.
The survey also found the growth in corporate profits dipping to 9 percent this fiscal from a still healthy 13.5 percent. More worrying was the ballooning fiscal deficit, seen at 6.8 percent, as opposed to 6.2 percent for the previous fiscal.
The central bank said the questionnaire was sent to 40 selected forecasters, of whom 17 participated in the current round. It further said the results represented the views of the respondents and did not reflect its views.
The other important forecasts of the survey for the current fiscal include:
* Inflation at (-)1.4 percent in first quarter of this fiscal and between 5-5.9 percent for whole year
* Possible cut in repo rate and cash reserve ratio in first quarter this fiscal
* For the next five years, GDP to grow at 7 percent, and at 7.5 percent for 10
* One dollar expected to be equal to Rs.50 in first quarter this fiscal
* Sensex to be around 9,700 points in first quarter
* Crude to be around $46 a barrel
* Industrial production expected to grow 1 percent in the first quarter this fiscal.