'GDP growth lower at 6.6-7% in 2004-05'

Uncertainties over agriculture growth is the reason for projecting 6.6-7% growth in 2004-05, over estimated 8.1% in '03-04, CII said.

Confederation of Indian Industry has warned that economic growth will come down to 6.6-7 per cent with farm output expected to grow only 0-2 per cent during 2004-05.

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Industrial growth would continue to be robust at 7 per cent and services sector will continue to record 9.2 per cent growth, CII said.

CII growth projection is nearer to RBI's forecast of 6.5-7 per cent GDP growth but lower than what the previous NDA Government had claimed.

The main reason for projecting a 6.6-7 per cent growth for 2004-05, compared to the estimated 8.1 per cent in 2003-04, is the uncertainties over agriculture growth.

Although agricultural growth will be lower compared to last fiscal's double digit growth, CII said it will not be difficult for farm output to grow by 0-2 percentage considering Meteorological Department's prediction of a "normal monsoon".

Expressing concern over sharp appreciation of rupee against US dollar, CII said "It will have an impact on the competitiveness of Indian exports"

It, however, expressed relief over the recent decline in rupee value against dollar.

With dollar appreciation against major currencies, CII said the pressure on rupee is expected to remain low.

The upward trend in industry and services will continue over the next few quarters as domestic and external demand continue to strengthen, it said.

CII said rising income and expenditure in rural and urban areas would lift the services sector.

"Companies are preparing to meet rising demand expectations by expanding capacity, modernising technology and focussing on marketing strategy," CII said.

Referring to corporate performance, CII said the manufacturing sector recorded a growth of 30.4 per cent in net profit while total turnover grew at 17.7 per cent in 2003-04.

The services sector achieved a growth of 39.7 per cent in net profit and 38.7 per cent in total revenues during the period.

"Strong growth in revenues together with a sharp reduction in interest costs has boosted the companies' profitability," CII said.