Projecting a "small" recovery in industrial performance, the Mumbai-based economic think-tank CMIE has pegged the Gross Domestic Product growth for the next fiscal at 7 per cent.
"A continuation of growth in agriculture, a small pickup in industry and a slowdown in the services sectors is expected to result in a GDP growth of 7.0 per cent during 2009-10," Centre for Monitoring Indian Economy (CMIE) said in a release.
This rise is expected to translate into a 7.1 per cent growth estimated for 2008-09, it added.
The think-tank said the industrial sector, which was hit hard by the global liquidity crisis in the third quarter of 2008, is expected to recover gradually in 2009-10 and register a six per cent growth.
"The industrial sector faces no supply constraints as new capacities worth Rs 5 lakh crore are expected to be commissioned in 2009-10," the release said.
A number of new capacities that were scheduled to be completed during 2008-09 are now expected to be completed in 2009-10, it added.
Though the industrial sector would face a contraction in demand from the international markets, lower interest rates and inflation would help in reviving the demand momentum.
It expects agricultural sector to grow by 2.4 per cent in 2009-10.