Credit rating agency ICRA disputed the official forecast of a lower 4.4 per cent growth in GDP, and said all indications in reality are that the economy was slated to grow by 5.4-5.5 per cent this fiscal.

"We find ourselves in the unhappy and completely unwarranted situation where the official statistics will show a 4.4 per cent rate of growth when all indications are that GDP growth in 2002-03 in reality was well over 5.0 per cent," ICRA said in its report 'Money & Finance'.

The GDP growth may be close to 5.4 per cent, ICRA said, adding it may not be too far from 5.5 per cent as pegged by the Reserve Bank of India and the finance ministry in its Mid-Year Review of the Economy.

The Central Statistical Organisation in its advanced estimates, pegged GDP growth at 4.37 per cent for 2002-03 assuming a fall in agricultural production by 3.12 per cent growth due to the decade's worst drought.

The CSO pegged industrial growth at 6.08 per cent and that of services at 7.07 per cent during this fiscal.

The assumptions of negative growth in agriculture, ICRA said, "stems from the perverse incentive facing state governments who in their desire to qualify for central drought assistance, prevailed on their own agri departments to overstate the impact of drought."  

"There is no evidence in the movement of farm product prices to suggest a large decline in agriculture output," it added.

Inflation rate, based on wholesale price index, increased to over 4.0 per cent mainly due to price rise in manufactured products and not much for agri commodities, ICRA added.

On the trade front, ICRA said merchandise imports are likely to exceed exports by $12 billion this fiscal.

But considering the higher software exports and remittances, the current account surplus was slated to be $7.0 billion or 1.3 per cent of GDP this fiscal as against $1.35 billion last year.

In 2003-04, merchandise exports growth is likely to slow down and current account balance would continue to be comfortably in surplus, it said.

Fiscal deficit of the Centre was likely to remain "on course" this fiscal due to the combination of lower interest rates, strong tax growth, higher loan recoveries and lower capital outlays, it said.