April 25: CII president, Mr B. Muthuraman, said on Monday that the apex chamber expects the GDP to grow in the range of 8 to 8.5 per cent in the current fiscal as challenges emerge in the form of rising crude prices. Last week Goldman Sachs had also revised its GDP forecast for India for FY12 to 7.8 per cent from 8.7 per cent due to the impact of higher rates, and a weaker capex cycle. The government was expecting to clock 9 per cent growth in the current fiscal. The PM’s Economic Advisory Council in its ‘Review of the economy 2010-11’ had said that it was possible for Indian to grow by 9 per cent in the current fiscal.
“We have seen in the last few months that growth in investment is moderating because the global commodity prices rising crude prices. Some of the green field projects in India are yet to take off,” he said. Growth in investment has fallen from 25 per cent in the first quarter of FY 11 to six per cent in the third quarter of 2010-11. He said that inflation remains a concern and a lot of it is also due to external factors like high commodity prices and high crude oil prices. “As a result the fiscal and monetary policy are also being tightened,” he said, and added that 8.5 per cent growth could be achieved in case agriculture performs well and the extent of increase in the raw material cost moderates.