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India to grow at 5.5 per cent next fiscal year: Ficci

India’s economic growth is likely to pick up and touch 5.5 per cent in 2014-15 as industrial output will recover to expand at 3.3 per cent, according to a survey by industry chamber Ficci.

Agriculture and services sector growth in the next financial year is pegged at 3.3 per cent and 7 per cent, respectively, according to the ‘Economic Outlook Survey’.

It also estimates that growth in the fourth quarter of the ongoing fiscal year (FY14) will pick up marginally to 5 per cent.

“However, this might imply that actual growth in the year 2013-14 will be slightly lower than the growth of 4.9 per cent projected by the Central Statistical Organization some time back,” Ficci said.

On inflation, it said that a majority of the participating economists felt that going ahead both Wholesale Price Index and Consumer Price Index-based inflation rates would remain range bound.

Inflation based on WPI is expected to stay at about 5.5 per cent in 2014-15, while that based on CPI will be at about 7.9 per cent, as per the survey.

On CPI becoming the new anchor for the monetary policy by the Reserve Bank of India, the opinion was divided.

Some economists felt that it is a good indicator, while others were of the opinion that monetary policy decision on the basis of a single parameter may not be a correct approach.

Moreover, they said that CPI is a fairly new series available only since 2011 and, hence, does not adequately portray the underlying trends.

Further, the median forecast for fiscal deficit as a per cent of gross domestic product (GDP) stands at 4.4 per cent for 2014-15. This is higher than the 4.1 per cent estimate announced in the Interim Budget last month.

Subsidy burden continues to be a bothering factor and can lead to fiscal slippages, according to the economists polled by Ficci.

On the external sector, the survey pegs current account deficit to remain in the comfort zone at 2.2 per cent in 2014-15.

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