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February 23, 2001
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Economic growth likely to be stunted in 2001-2002


The Indian economy is currently at a difficult stage and growth is likely to be stunted in the next financial year 2001/02 (April-March), the government said on Friday.

The Economic Survey for 2000/01, an annual report card on the economy, reiterated earlier government forecasts of six per cent growth in the current financial year ending on March 31, down from 6.4 per cent a year earlier.

"Because of irregular rainfall for the second successive year, agricultural growth has been low or absent in 2000/01," it said.

The Survey estimated growth in agriculture and allied sectors at 0.9 per cent in 2000/01, marginally up from 0.7 per cent a year earlier.

"Industrial growth seems to have slowed down and the sentiment for new investment has not improved," it said.

Other problems compounding the uncertain growth prospects were high global oil prices and a slowdown in the US economy, which is likely to affect the rest of the world, the Survey said.

It cautioned that there could also be an impact from last month's devastating earthquake in Gujarat, which is feared to have killed more than 30,000 people and destroyed hundreds of thousands of houses.

"Although the major industries of Gujarat have fortunately escaped the worst effect, the impact of dislocations on the growth process cannot be ignored. It is therefore essential that the unfolding economic situation be watched carefully," it said.

"Measures need to be taken to instil confidence in the economy so that the growth momentum of the 1990s can be improved upon," the survey said.

Economic Survey 2000-2001
Budget 2001

Economic Survey on the official Web site of the Ministry of Finance

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