Mumbai: The Centre for Monitoring Indian Economy (CMIE) in its latest monthly review
here on Monday said that India's economy is expected to maintain the eight-plus growth trajectory in FY 12 with its real GDP projected to grow by 8.8 per cent during the fiscal.

The CMIE said, "We project that real GDP will expand by 8.8 per cent during the fiscal (2011-12)," adding that the domestic environment is conducive for growth, private
final consumption expenditure is projected to grow by a healthy 7.5 per cent and gross fixed capital formation by 15 per cent.

"It is assumed that the south-west monsoon will be normal for the second consecutive year in 2011," CMIE said, while adding that on the downside risks, these relate mainly to poor rainfall and to the performance of the global economy.

In FY 11, India's economic performance has been robust and real GDP is estimated to have grown by nine per cent, it said.

"This has been powered by a rebound in the agricultural sector following the drought in 2009-10, and a sharp pick-up in private consumption and gross fixed capital formation,"
CMIE said, adding that the agricultural and allied sector is projected to grow by 3.1 per cent in 2011-12, on top of the 5.1 per cent growth estimated in 2010-11.

The industry, including construction, is projected to grow by 9.4 per cent during FY 12 as compared to 8.6 per cent estimated in 2010-11. Steel, cement, automobiles and petroleum
products segments are projected to see a nine per cent-plus growth in FY 12, it said.

Other industries like paints and varnishes, tubes and pipes, sponge iron, lifts and elevators, domestic refrigerators and transformers are expected to do well, too, CMIE said.

Growth in industrial production will be driven by a rise in consumption demand and investment demand.

"Consumption demand, in turn, will be driven by a rise in corporate wages, fresh employment generation and lower inflation. Investment demand is expected to remain buoyant, as more and more projects move into the implementation stage," it said.

Projects worth Rs 8 lakh-crore are scheduled to be commissioned in FY 12 as compared to Rs 3.6-lakh-crore in FY 11.

This is expected to boost activities in construction sector. The sector is projected to grow by 10.5 per cent during the fiscal, as compared to an estimated 9.5 per cent in
2010-11.

(Agencies)