Thursday, December 23 2004 18:07 Hrs (IST) - World Time -

Mumbai: The Reserve Bank of India today (Dec 23, 2004) said that the overall GDP growth for 2004-05 was expected to be 6-6.5 per cent based on combined downside risks of high and uncertain oil prices subject to changes in the international liquidity environment remain manageable. On the current reckoning, as the mid-term review indicated, the overall GDP growth is expected to be 6-6.5 per cent, placing India among the faster growing economies in the world this fiscal, the RBI said in its Report on Currency and Finance 2003-04.

As global environment remains uncertain due to rising crude prices and imbalances, the growth prospects of the Indian economy continued to remain strong, the report said.

Adherence to the envisaged targets under the Fiscal Responsibility and Budget Management Act, 2003 would release more resources for the productive private sector investment leading to additional employment opportunities and enable the Indian economy to realise its potential, it added.

The report said the Balance of Payment (BoP) position remained comfortable while the strong growth in merchandise exports was supplemented by exports of services and buoyant remittances.

On the agricultural front, the Rabi crop is expected to benefit from the Northeast monsoon, which has been satisfactory so far.

The increase in bank credit to the industry, buoyancy in the IT sector, significant growth of the telecom and transport sectors and strong tourist inflows are expected to add further impetus to the services sector growth, it said.