The Hindu Business Line : NCAER raises GDP growth to 9.1% in 2007-08

The Council said that the 2007-08 budget estimates for all States combined indicates that the revenue deficit might actually disappear this year, a development that seems difficult to achieve at the Central level.

Our Bureau

New Delhi, Jan 31 The National Council of Applied Economic Research (NCAER) has revised its current fiscal gross domestic product (GDP) growth of the economy to 9.1 per cent, against the 8.9 per cent it had forecast in October 2007.

In 2006-07, the GDP growth (revised) was 9.35 per cent.

In its latest quarterly review, released here, the independent think-tank on policy contends that a favourable monsoon, distinct improvement in the fiscal position of the Central Government with capital inflows continuing its strong support to investment activity through increased lending have all prompted this upward revision.

Agricultural output

It said that the agricultural output is projected to grow at 3.8 per cent but the improvement in output would be more significant in the case of non-foodgrain crops.

There is some easing of price pressures in the case of pulses, fruits and sugar, while cereals, edible oils and milk prices have increased faster than the overall price index.

Industrial GDP

The Council said industrial GDP is projected to rise by 9.1 per cent and GDP from services is projected to grow by 10.9 per cent.

Even as the overall growth of the industrial sector so far this year remains above 9 per cent, sustaining this rate of growth would require continued momentum for investment expenditures.

Capital critical

For this to occur, access to capital would be critical and the inflow of foreign capital would be important for India, it said.

Fiscal deficit

The fiscal deficit is projected to decrease from 4.1 per cent of GDP during 2000-01 to 2002-03 to 2.3 per cent in 2007-08.

The fiscal deficit of the Central Government is projected at 3.3 per cent of GDP and current account balance at 1.6 per cent of GDP.

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