The Hindu Business Line : CII expects GDP to grow at 6.5 pc in 2004-05

THE Confederation of Indian Industry (CII) has pegged the GDP growth for 2004-05 at around 6.5 per cent, with the industry and services sectors expected to lead the way.

The chamber, in its latest report on the economy, has said that the growth in agriculture would be only around 1 per cent, primarily due to delay in monsoon and high base of the previous year.

CII has, however, said that with 8.5 per cent non-agricultural GDP growth, it would be feasible to look at an overall pace of 7.5 per cent, if not 8 per cent, on a sustained basis over the next 5- to 10-year period.

According to the CII report, the population below poverty line was expected to decline to 19 per cent by 2007, from 26 per cent at present.

Stating that there has been overall improvement in schooling data, the report has said that 96 per cent of the children attended at least five years of schooling.

The report, however, expressed concern at price increases, particularly in product groups such as fuels and metals, which is a matter of concern to industry. The factors contributing to price rise are global crude oil prices, increase in commodity prices and delayed rains.

The report said that excess liquidity in the form of soft interest regime in developed countries had led to large capital inflows and spurt in money growth, leading to price rise.

As for crude oil price, CII said that it expected crude oil prices to remain at about $45.

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