Speaking of agriculture, Rangarajan defended the bleak projection of a 2 per cent growth in the sector, saying that the slide was, in part, the result of the high growth in the previous year, which acted as the base for this year’s figures. The outlook report also attributed the slide to the weak southwest monsoon.

In the manufacturing sector, the EAC has projected a growth of 7.2 per cent —significantly lower than what was achieved in the past four years. In the power, gas and water supply sector, the council expected that the generation would improve in the balance part of the current fiscal and the overall GDP in the sector is likely to grow by 6.5 per cent, about the same level as in the previous year.

It said the GDP in the industrial sector is expected to be 7.5 per cent, about 1 per cent below what was recorded in the previous year on slower domestic consumer demand growth and weaker expansion of export demand. The services sector would grow by 9.6 per cent in 2008-09, lower than in any of the previous three years.

7.7%Projected growth in GDP for current fiscal, down from previous fiscal’s 9%

13%projected rise in inflation

Projected sectoral growth

agricultural 2%

manufacturing 7.2%

Power, gas &

water supply 6.5%

industrial 7.5%

Services 9.6%