New
Delhi: The Indian economy to slow down further in
2007-08 due to surging interest rates, appreciating rupee
and poor infrastructure, CII has warned in its latest
''state of the economy'' survey.
During
the fourth quarter of 2006-07 ending in March 2007 the
economy grew at 9.4 per cent compared to 10 per cent in
the same quarter of 2005-06.
The
apex industry chamber has pegged GDP growth for the year
at 9.2 per cent.
Even
though positive growth is expected for sectors such as
agriculture, industry and services, the economy would
face a downward pull, CII said in its survey.
On
agriculture the CII survey matches the optimism expressed
by the Centre for Monitoring Indian Economy. (See:
Agricultural
production seen rising 2.6 per cent in FY 08: CMIE)
CII says the agricultural sector is expected to grow to
three per cent from the current 2.7 per cent due to the
efforts adopted to produce primary articles to boost their
supply in an effort to check inflation.
The
study also indicated a declining trend in the agricultural
sector with the decrease in oilseed production, which
has shown a decline of 14.79 per cent. This according
to CII would lead to increase in import of edible oil
owing to its huge demand.
"Total
oilseeds production has declined and recorded 23.26 million
tonnes against the target of 29.40 million tonnes in 2006-07,
registering a negative growth rate of 14.79 per cent,"
the survey said.
The
body has thus suggested restructuring the domestic pricing
policy of various crops as more and more farmers are switching
from oilseeds to producing wheat and gram that are more
lucrative options.
Growth
of Indian industry is also expected to face a downward
trend on the backdrop of some rigid monetary measures
taken by the Reserve Bank of India (RBI).
The
services sector, according to CII, is expected to grow
marginally from 2006-07 due to high demand specifically
in financial services and business services, which includes
the information technology (IT) and IT-enabled services
(ITeS).
"The
three major components of the service sector namely, trade,
hotels and communications; financing, insurance, real
estate and business; and community, social and personal
services grew at 13.0 per cent, 10.6 per cent and 7.8
per cent respectively," CII said.
On
the issue of the Indian rupee appreciating by the day,
the chamber said it had made a negative impact on the
profit margins and bottom lines of the textile and leather
sectors.
|