Riding on bright crop prospects on account of a good monsoon, India's economy is expected to grow at 5.8 per cent in the current fiscal, says an Assocham study.
The improvement in growth in the current fiscal, as compared to five per cent in 2012-13, is expected to happen because of a healthy agricultural output leading to robust rural demand and its multiplier effect on services and manufacturing, the paper said.
"Agriculture would kick-plough the growth this year as Monsoon was in excess in several parts of the country and the extended spell of rains would help the sowing of the Rabi (winter) crop. The Kharif crops in any case are set to give a bumper harvest," Assocham secretary general D S Rawat said.
Although the share of agriculture in the country's gross domestic product (GDP) has gone down substantially to less than 14 per cent over the years, it would be the multiplier effect that will push expansion of activities in manufacturing and services, Mr Rawat added.
The Assocham paper pegs agriculture sector to grow at 5.5 per cent to six per cent in the current fiscal, thereby pushing up contribution of other sectors' to the GDP.
"Going by the established relationship between agriculture and industry, each 1 per cent additional growth in agriculture would result in 0.4 per cent to 0.6 per cent additional growth in industry," the paper said.
As on March 2013, the share of services, industry and primary sector in GDP stood at 59.6 per cent, 24.8 per cent and 15.6 per cent respectively.
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