Private consumption, which has witnessed a sharp rise in the current financial year, is likely to buoy GDP growth, even as the services sector continues to contribute significantly to growth. High inflation, however, remains a concern.
Growing Assurance- Increasing consumption raises an argument for more investment. Capacities are being expanded in many sectors, especially in automobiles and textiles.
- Consumption in the urban sector, one of the key drivers of India's growth through 2003-8, is now spilling over to the rural sector.
- Contrary to the heady days in 2003-8, the overall investment growth is likely to be moderate due to the high base effect in the power and oil and gas sectors.
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