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Economic growth seen at 7%
December 09, 2005 12:35 IST
Last Updated: December 09, 2005 13:00 IST
Buoyed by 8.1 per cent growth in the first half of the current fiscal, the Mid-Year Economic Review on Friday projected high growth of about 7 per cent in 2005-06.
The mid-year review, tabled in Parliament on Friday, said agriculture growth was expected to be about 3 per cent supported by foodgrains output at 5 per cent recorded in 2004-05.
The review said services sector has maintained the growth momentum with 10 per cent rise in first half of 2005-06, while the industrial sector, particularly the manufacturing sector, was satisfactory at 10.2 per cent.
The performance of the mining and electricity sectors, however, fell below expectations, it said, adding that the deceleration in the growth of petroleum products, coal and electricity was also a cause for concern.
According to the review, in spite of a rapid rise in international crude prices, domestic inflation has remained at a moderate level and 'there are no indications of fundamental macro-economic imbalances.'
'For sustained, robust and inclusive growth, what is needed is a combination of appropriate and timely policies and delivery mechanisms to enhance investment, rapid progress in infrastructure and accelerated improvements in education and health of the people,' it said.
The Review pointed out that infrastructure continues to be major bottleneck for potential surge in growth in the country. The incremental spending on infrastructure in India is also too low for the size of the economy and its requirements.
The Committee on Infrastructure, headed by Prime Minister Manmohan Singh, has estimated investment requirements in some of the key sectors and a substantial share of this investment is expected to come from the private sector, it added.
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