By IANS,
New Delhi : Severe rainfall deficiency coupled with the economic slowdown could drag India’s economic growth to 4.7 percent this fiscal, according to an industry lobby.
“If the monsoon deficiency increases to 22 percent, the agriculture sector could post a negative growth of 6 percent and the overall GDP (gross domestic product) growth could decline to 4.7 percent,” said Sajjan Jindal, president of the Associated Chambers of Commerce and Industry (Assocham).
If monsoon is normal, the agriculture sector would expand 2 percent and the economy could grow at 6.7 percent.
But at present, the monsoon is deficient by 25 percent, and if there is no improvement in the next two months, things would turn worse, Jindal said in a statement Monday.
According to Assocham, India’s total foodgrain production could fall by 20 percent this year.
Jindal said the chamber expected a 5 percent growth in the industrial sector amid low base effect during the ensuing quarters, while the consumer durables and infrastructure sectors are expected to pick up.
“Our major worry in the industrial sector is the deteriorating position of merchandise exports, which have posted a ninth consecutive fall of 29 percent in June. We hope some improvement in the sector after October,” he said.
The government’s increased focus on infrastructure and rural housing has boosted the performance of the construction sector, Assocham said.
“As the cement and steel sectors have shown smart activities, we expect the construction sector to grow at 9 percent this fiscal.”
Assocham added that the services sector would post 8.5 percent growth this fiscal in the backdrop of enhanced activities in the community, social and personal services (CSPS).
Indian economy grew 6.7 percent in 2008-09. The government has projected the economy to expand at least by 6 percent this fiscal.