Indian economy to grow by 8.8% this fiscal: D&B

NEW DELHI: Buoyed by robust services sector growth, the Indian economy would grow by 8.8 per cent in the current fiscal, a Dun & Bradstreet report today said.

"D&B expects the GDP to record an average growth of 8.8 per cent during FY12... the uptick in GDP growth during FY12 is expected to be driven by a robust services sector growth", the D&B report said.

D&B expects the services sector to have grown by around 10.5 per cent during the fourth quarter (Q4) of FY11, taking the services sector growth for FY11 to 9.6 per cent, it added.

"The services sector is expected to maintain this growth momentum and clock a robust growth of 9.9 per cent during FY12," the report said.

Improving business and consumer optimism and rising income levels are likely to provide support to services segment such as financial services, tourism, transport and communication etc.

India's GDP (Gross Domestic Product-market value of all goods and services produced within a country in a given time period) growth, however, is expected to revert to its near 9 per cent growth trajectory during the second half of FY12, it said.

High interest rate scenario and input prices, coupled with muted investment activity and uncertainties surrounding the international economic situation are likely to limit the GDP growth in the first half of FY 2011-12, pulling down the average growth to 8.8 per cent despite a 9 per cent uptick in the second half of the current fiscal, the report showed.

The D&B report, however, is in sharp contrast to the projections made by multilateral lending agency Asian Development Bank (ADB) and ratings agency Standard & Poors.

Recently, ADB lowered its growth forecast for the Indian economy to 8.2 per cent for the current fiscal from the earlier projection of 8.7 per cent on account of surging global oil prices and the RBI's tight monetary policy stance.

S&P too came out with its projection recently which said the country's GDP would record 8.3 per cent growth in 2011-12.

The D&B forecast though, is in line with the Economic Advisory Council (PMEAC) projection of 9 per cent growth in the current fiscal.

The Indian economy is estimated to grow at 8.6 per cent in the fiscal ended March 31, 2010.