India to grow at 5.5% in FY15: Ficci

Tags: Economy
India's economic growth is likely to pick up and reach 5.5% in 2014-15 as industrial output will recover to expand at 3.3%, says Ficci.

The Economic Outlook Survey by the industry chamber pegs agriculture and services sector growth in the next financial year, starting April 1, at 3.3% and 7% respectively.

It also estimates that growth in the fourth quarter of the current fiscal will pick up marginally to 5%.

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

On inflation, it said that majority of the participating economists felt that going ahead both WPI and retail inflation rates would remain range bound.

Inflation based on Wholesale Price Index (WPI) is expected to stay at about 5.5% in 2014-15 and the one based on the Consumer Price Index (CPI) will be at about 7.9%, as per the survey.

On CPI becoming the new anchor for the Reserve Bank's monetary policy, 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% of GDP stands at 4.4% for 2014-15. This is higher than the 4.1% 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 (CAD) to remain in the comfort zone at 2.2% in 2014-15.

Moreover, the rupee value is projected at 61 against the US dollar by March-end 2015.

The participating economists cited high cost of borrowing and delays in government approvals as the key reasons hindering investments.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • If the first 17 editions of Saarc were tragedies, Kathmandu was a sham

    Rarely has a regional grouping such as the South Asian Association of Regional Cooperation (Saarc) promised so much and delivered so little.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Varun Dutt

By the power of wind, let there be light

In India, the development of wind power began in the ...

Zehra Naqvi

Being unrealistic can be good for you

Depression is a term that most people use very casually ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture