Credit Suisse First Boston, a leading investment banker, has scaled down India's GDP growth from 5.7 per cent to 5.4 per cent for the financial year 2002-03.

Director and chief economist of CSFB, P K Basu, told reporters at the sidelines of a Confederation of Indian Industry seminar in Kolkata on Tuesday that downward revision of GDP growth had been necessitated due to poor growth of the agricultural sector.

He said while the manufacturing sector had accelerated, the services sector has showed a steady growth in the current financial year.

Asked about CSFB's growth forecast for the next financial year, Basu said it would be around 6.3 per cent.

According to him, the upward revision had been due to prospects of good agricultural performance, coupled with a dynamic manufacturing sector and a vibrant services sector. 

The CSFB economist, who operates out of Singapore, said that India's GDP growth had been second highest in the Asian region after China, which according to him, (India) will overtake the rest of the region in the next 15 to 20 years.

Regarding inflow of foreign direct investment, Basu said India was under-reporting the quantum of foreign capital, which the country was receiving.

He said, quoting IFC reports that India does not consider reinvestment by multi-national companies operating out of the country as a FDI component.

In addition to that, MNCs based in India taking inter-corporate loans from parent companies abroad were also not taken as a part of FDI.

Basu said that if these two aspects were taken into account, then the quantum of annual FDI inflows to India would be $9 billion, as compared to $20 billion of China.

On the issue of revival of capital market, Basu said that it should be on the recovery path as a number of IPOs, including those of Maruti and TCS, were in the pipeline in the next year or so.

Basu said that the disinvestment process will also speed up in the next six months as financial bids of a number of companies were only to be invited thus completing their sell-off procedures.

India's export performance in the current year will likely be around the region of 17 per cent, he said.