The Indian government said the inflationary impact of foreign fund flows coupled with a slowdown in the US, an appreciating rupee and a sluggish infrastructure sector are major challenges for sustaining economic growth of over 9 pct.
The government, in its economic survey for 2007-08 presented in Parliament, said India's gross domestic product (GDP) was projected to grow 8.7 pct in 2007-08, well below 9.6 pct growth in 2006-07, on an appreciating rupee, a slowdown in the consumer goods segment and infrastructure (both physical and social) constraints.
Inflation based on the wholesale price index is likely to decline to 4.1 pct in 2007-08 from 5.6 pct a year earlier, on deceleration in the growth of investment goods prices to 4.3 pct in 2007-08 from 5.5 pct, the report said.
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