After facing headwinds for two consecutive years, the economy is set to grow at 6.8 per cent next fiscal on reversal in deterring factors, says the economic think tank Centre for Monitoring Indian Economy (CMIE).

"The economy is set to grow at 6.8 per cent in 2013-14, after showing a sharp deceleration in the preceding two years," the CMIE said in its February review of the economy.

It said the slowdown is due to supply constraints emanating from mining and agricultural sectors, slow implementation of projects and a slowdown in discretionary spends.

In FY14, "growth will be aided by easing supply constraints, lower inflation, softening of interest rates and fast-tracking of investment projects," it said.

However, it is not very soft on headline inflation numbers which it sees settling at 6.8 per cent in FY14.

As per the advance CSO estimate, the GDP may grow a decadal low of 5 per cent. An upbeat CMIE expects it to touch 5.7 per cent this fiscal, 2 bps above even the Finance Ministry's projection.

In an announcement which spooked a lot of stakeholders, the Central Statistical Organisation last week announced that the economy will grow at 5 per cent this fiscal, a decadal low after the 4.7 per cent growth in FY02.

This would be much lower than the 6.2 per cent clocked in FY11 and the 6.7 per cent achieved in FY10, in the immediate aftermath of the post-Lehman financial crisis.