Indian economy expected to grow by 6.7 per cent in 2013-14: Ficci

With the Reserve Bank of India (RBI) to decide on interest rates tomorrow, economists said in a recent survey that economic growth in the next financial year would be 6.7 per cent. They also expected a cut in the policy rates in the coming policy review.

According to The Economic Outlook Survey conducted by the Federation of Indian Chambers of Commerce and Industry, the ''eventual interest rate fall will trigger consumption-led recovery to the industrial production, which shall bail the Indian economy out of the present situation of the twin deficit.''

Ficci president and country head of HSBC India, Naina Lal Kidwai said, the revival in sentiment reflected cautious optimism and was an indication of improved sentiment post September 2012, mainly due to government's renewed thrust to the reforms agenda.

Industrial production had fallen this financial year, a decline in five of the eight months till November was evident with November figures showing contraction of 0.1 per cent.

As a result, industry has been pressing further its demand for a rate cut. The surveyed economists expected a repo rate cut of 25-50 basis points (bps) in the third quarter review, with the majority feeling a reduction of 75-100 bps through FY14 was likely.

"This improvement is largely based on the expectation of a possible cut in the policy rates which is expected to have positive impact on industrial growth and consumption," the survey said.