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Our Bureau

Mumbai , Dec 13

THE Centre for Monitoring Indian Economy (CMIE) has revised upwards its forecast for real GDP growth for 2005-06 to 7.6 per cent, from its earlier expectation of 6.8 per cent.

This includes an upward revision in growth projected for the services sector but a downward revision for growth in industry (mining, quarrying, and construction), according to the CMIE.

The higher GDP growth expectation reflects the upward revision of growth in the services sector, now pegged at 9.2 per cent, against 7.5 per cent estimated earlier, a statement from CMIE said.

The revision of growth rate in services was itself led by the trade, hotel, transportation, and communications sectors, which registered higher-than-expected growth, according to CMIE.

This segment is now expected to grow by 11 per cent during the year, against the earlier forecast of nine per cent.

The other two segments of the services sector - banking and insurance, as well as real estate and business services - also witnessed accelerated growth in the first half of the current fiscal. These segments are projected to grow at 8.5 per cent against six per cent earlier.

"We have noticed a better offtake in credit; we also see rising interest rates," said Mr Riyaz Khan, Manager (Macroeconomics), CMIE, on the banking industry.

The community, social, and personal services group has been forecast to grow by six per cent, against 5.5 per cent earlier.

The forecast for growth in industry has been revised downward to 8.1 per cent from 8.7 per cent.

The performance of the mining and quarrying and the construction sectors turned to be poorer than expected during the first half of the fiscal, CMIE said.

Growth rates for these sectors have been scaled down to two per cent and 8.5 per cent respectively, from six per cent and 10 per cent projected earlier.

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