Monday, February 20 2006 14:49 Hrs (IST) - World Time -

New Delhi: Credit rating agency ICRA today (Feb 20,2006) pegged upwards economic growth projection to 7.7 per cent for this fiscal, which is still lower than Government's estimate of 8.1 per cent.

For next fiscal, ICRA expects GDP growth to be within the range of 7.4-8.2 per cent.

"Our own estimate are that in 2005-06, the economy will grow by about 7.7 per cent, with agriculture and allied services expanding by 2 per cent and non-agricultural sector by 9.1 per cent," ICRA said in its report 'Money & Finance'.

Earlier, economic think-tank NCAER had projected 7.8 per cent growth for this fiscal.

Both ICRA and NCAER's projection are lower than 8.1 per cent estimated by Central Statistical Organisation but corresponds with Reserve Bank's projection of 7.5-8 per cent for 2005-06.

Though ICRA had projected 6.9-7.5 per cent growth last year, it revised the GDP projection on account of better than expected performance of industry and services sectors.

Justifying the higher GDP growth projection, ICRA said manufacturing is set to grow by an impressive 9.2 per cent to push up the overall industrial growth to 7.7 per cent while services sector is slated to grow by 9.9 per cent.

"Actual outcome in agriculture will be less than even the lower end of our earlier estimate (of 2.5-3.5 per cent), while manufacturing and service sector will have performed very much better," it said.

Assuming normal monsoon this year, higher crude output and construction activities, ICRA said "Overall GDP growth could be 7.4-8.2 per cent while per capita GDP could rise by5.7-6.4 per cent."