NEW DELHI: With the country’s industrial growth contracting by 0.4 per cent in October this year for the first time since April 1993, the fear is that the Index of Industrial Production would continue to slide further till the end of 2009 and a recovery could only set in later. Commenting on the negative growth, Prime Minister’s Economic Advisory Council (PMEAC) Chairman Suresh Tendulkar noted that the industrial slowdown would have a bearing on the country’s overall GDP (gross domestic product) growth as well. And, therefore, the Council would revisit the GDP growth figures, which it has now pegged at 7.7 per cent for 2008-09. “We are taking stock of the situation and we will revise our forecast accordingly,” he said.
Meanwhile, the Asian Development Bank (ADB) has already scaled down India’s GDP growth projection to seven per cent from its earlier estimate of 7.4 per cent for calendar year 2008 on account of the global financial crisis directly impacting the banking system and financial markets in the country.
As for calendar year 2009, the ADB has forecast a further decline in economic growth to 6.5 per cent from its earlier projection of seven per cent. “India, South Asia’s most dynamic economy in recent years, is reeling from the direct effect of the global financial crisis on its banking systems and financial markets. The growth projection for India has been revised down to seven per cent in 2008 and 6.5 per cent in 2009, from nine per cent in 2007,” the Bank said.
ADB’s forecast, however, is still better than the World Bank which on Tuesday projected the Indian economy to grow by 6.3 per cent in 2008 and by 5.8 per cent in 2009. For the first half of 2008-09, the economy has posted a growth of 7.8 per cent as compared to a growth of 9.3 per cent in the same period a year ago.