CMIE projects lower GDP growth at 8.8 pc next fiscal

Mumbai, Feb 17 (PTI) India''s GDP growth is expected toslow down to 8.8 per cent next fiscal (FY 12) from theimpressive 9.2 per cent projected for this fiscal (FY 11), aleading economic think-tank said.

Growth in FY 11 has been powered by a rebound in theagricultural sector and a sharp pick-up in private consumptionand this growth momentum is expected to continue next fiscalas well, it said.

For FY 12 when growth is expected to slow down, "thedownside risks relate mainly to the poor rainfall and to theperformance of the global economy," the Centre for MonitoringIndian Economy (CMIE) said in its latest review of thecountry''s economy here.

Growth in the agricultural and allied sector, industrialsector and in the services sector and its segments is expectedto decelerate, it said.

However, the construction sector is expected to farebetter in FY 12 than in FY 11.

"Growth in the agricultural and allied sector isprojected to decelerate to 3.1 per cent in 2011-12, from the5.1 per cent growth estimated in 2010-11. This decelerationexplains the marginal drop in real GDP growth in 2011-12,"CMIE said.

The industrial sector, including construction, isprojected to grow lower at 9.4 per cent as compared to the 9.5per cent estimated in FY 11. .

"Steel, cement, automobiles and petroleum products segments are projected to see a nine per cent-plus growth in2011-12. Other industries like paints and varnishes, tubes andpipes, sponge iron, lifts and elevators, domesticrefrigerators and transformers ar expected to do well too,"CMIE said.

Industrial production growth will be driven by a risein consumption and investment demand, it said.

Consumption demand will be driven by a rise incorporate wages, fresh employment generation and lowerinflation while investment demand is expected to be buoyant,as more and more projects move into the implementation stage,it said.

Projects worth Rs 8-lakh-crore are scheduled to becommissioned in FY 12 as compared to Rs 3.5-lakh-crore in FY11.

"This is expected to push up activities in theconstruction sector. The sector is projected to grow by 10.5per cent during the fiscal, as compared to an estimated 9.5per cent in 2010-11," CMIE said.

Growth in the services sector and its segments isprojected to moderate in FY 12.

The services sector is projected to expand by 9.9 percent in FY 12, lower than the estimated 10.2 per centestimated in 2010-11, the think-tank said.