CII study: Growth rate in India may dip to 8 per cent
New Delhi: India's economic growth rate, second fastest in the world for the last three years after China, is expected to slow down this fiscal due on the back of high international oil prices and rising inflation and interest rates, so says a State of the Economy report from the Confederation of Indian Industry (CII).

Through the report, the CII is sticking to its June projection of an eight per cent growth for the country in 2006-07, marginally less than the 8.4 per cent growth recorded last fiscal.

'Oil price hike and fear of high inflation coupled with increasing interest rates are expected to affect the performance of manufacturing and services sectors adversely and this is expected to bring down the growth rate slightly for the current fiscal,' says the report released Sunday.

In its June issue of SOE, the CII had observed that the economy in the current fiscal might clock a growth of less than 8.4 percent reached in the last fiscal.

'As there are no significant developments in economic conditions since then, CII stays with the projection made earlier,' the report states.

According to CII estimates, during the current fiscal agriculture would clock a 3 per cent growth while industry will register 8.5 per cent and services 9.6 per cent, 'with overall GDP growth forecast at 8 per cent'.

The report points out that the agriculture, industry and services contributed to the total economic growth last year by 9.0 percent, 27 percent and 64 percent respectively.

For the April-June quarter of 2006-07, the CII expects the GDP growth at around the 8 percent mark.

In a comparative study, the report points out the most major industrial countries have witnessed inflation on an upswing mainly on account of global oil price increases.
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NCAER wants agri markets regulated
New Delhi: According to economic think tank, National Council or Applied Economic Research (NCAER), inefficiency in agriculture markets is a major reason for the poor performance of the sector, and so a regulatory system was needed to oversee competition in the agriculture markets.

In its monthly report, the think tank has said that an appropriate law was needed in the country which would seek to accomplish economic regulatory functions and also promote, guide, and discipline the establishment and operation of agriculture markets.

However, reforms in Indian agriculture markets needed to be introduced with caution, the report said. A proper regulation and competition regimen needs to be put in place before attempting liberalisation agricultural markets, the report says.

According to the think tank, it is time to explore the possibility of establishing a single national regulatory agency for overseeing the implementation of measures concerning regulation and competition during the transition phase.
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