With the spectre of a widespread drought looming large, global credit rating agency Moody’s on Wednesday projected India’s GDP (gross domestic product) growth to slide to 6.2 per cent in 2009-10 from 6.7 per cent in the previous fiscal.In its report on growth outlook, the rating agency’s research arm Moody’s Economy.com said: “India’s GDP growth for fiscal 2009-10 is forecast to slow to 6.2 per cent. The drought is clearly taking steam out of India’s growth momentum and another emerging concern is food price inflation”.
Moody’s pointed out that a drought situation in large parts of India was most likely to have an adverse effect on the economy as although the agricultural sector accounts for less than a fifth of the country’s GDP, two-thirds of its people live in rural areas and depend on farm income.On the positive side, government spending is expected to go up significantly, despite the burden of a high public debt.