Asserting that the GDP growth was expected to slow down marginally in 2004-05, the Confederation of Indian Industry has pegged the GDP growth for the year at around 6.5 per cent.

The growth would continue to remain strong in the industry and services sectors, while the growth in agriculture would be around 1 per cent due to erratic monsoon and the high base of the previous year.

However, the CII has said that with 8.5 per cent non-agricultural GDP growth, it was feasible to look at an overall pace of 7.5 per cent, if not 8 per cent, on a sustained basis over the next 5–10 years.

The report expressed concern at price increases, particularly in few product groups such as fuels and metals, which was a matter of concern to the industry.

The factors contributing to price rise are global crude oil prices, increase in commodity prices and delayed rains. The report said excess liquidity in the form of soft interest regime in developed countries had led to large capital inflows and spurt in money growth, leading to price rise.

On the crude oil price, the CII said it expected prices to remain at about $45. The report, however, said that though global oil demand was expected to slow down to an annual increase of 2.1 per cent, India's demand would not slowdown, as much and it would hover at around 4.4 per cent.

Earlier, the CII had pegged the expected growth rate at around 7 per cent for the year and set a growth target of 8 per cent decadal growth leading to a GDP of more than $2 trillion in next 10 years.

The chamber, in its latest report on the Indian economy, had said the proportion of population living below poverty line was declining. According to the CII report, the population below poverty line was expected to decline to 19 per cent by 2007 from the present 26 per cent.

The CII report has also indicated that there had been a marked improvement in the overall literacy in the country. Stating that there had been an overall improvement in schooling data, the report pointed out that 96 per cent of children attended at least five years of schooling.