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CII forecasts 8% growth rate for India

Manufacturing sector has registered 8.9% growth in Q4 of 2005-06, as compared to 8.1% last year, says CII.

india Updated: Jun 25, 2006 12:25 IST

India's economic growth will remain high at a notable eight per cent for the current fiscal but will slip from last year's 8.4 per cent, says the Confederation of Indian Industry (CII).

The manufacturing sector has shown considerable increase in its growth rate of 8.9 per cent in the fourth quarter of 2005-06, compared to 8.1 per cent last year.

A relatively better growth has been recorded by the electricity sector at 6.1 per cent.

A slowdown in the mining sector has been projected as a major concern by the industry association. The cause for this was the slow growth of IIP (index of industrial production) that fell to 8.2 per cent, from last year's 8.4 per cent.

The mining sector's growth rate has slipped to three per cent from previous year's 3.7 per cent.

The corporate sector performance has been evaluated on the basis of studies done on 3,018 firms by the CII.

The study has revealed a notable decline in the growth of net sales by about nine per cent. The service sector too witnessed a decline.

The CII has urged the Reserve Bank of India (RBI) not to continue with its policy of keeping inflation below its projected target due to this year's spiralling oil prices and fast changing domestic and global macro-economic conditions.

The CII observed that growth in imports has declined sharply and become less than exports.

It also emphasised the need to put a check on the growth of trade deficit, which grew to $39.6 billion in 2005-06 from $25.9 billion in 2004-05.