Dry run sees FM cut GDP projection to 6%

New Delhi: An errant monsoon has cast a dark cloud over the economy's growth prospects with finance minister Pranab Mukherjee paring the 7% GDP growth rate he had projected at the time of the Budget to a more modest "6%-plus'' on Tuesday. Independent analysts are also cutting growth projections.      The finance minister, speaking on the sidelines of the Income Tax chief commissioners' conference in Delhi, said though the global economy had started stabilising and early signs of revival were visible in the Indian economy too, "delayed monsoons have cast a shadow on agricultural growth...and may affect the overall GDP''. He, however, expressed confidence that the impact would not be more than a percentage point and growth would be in the range of 6%-plus as earlier projected by the Reserve Bank of India. He said 161 districts across the country had been hit by drought so far and the government was working on a contingency plan.      The revised projection was a departure from what he had predicted just a month ago. "My target is to touch 7% GDP growth this year and take it to 8%-9% thereafter,''he had said after presenting his Budget for 2009-10 on July 6. Spelling out the basis for his optimism, he had said, "If we are supported by a good monsoon, this is more than possible.''      Independent economic think-tanks have also painted a very grim picture of the impact of falling crop acreages due to scanty rains. The Centre for Monitoring Indian Economy pared its GDP growth projection down to 5.8% from its earlier forecast of 6.6%. Govt working on monsoon back-up plan  New Delhi: With rains playing truant, investment analyst Goldman Sachs said agriculture could decline by 2%, but it retained its GDP growth forecast of 5.8%.      Rating agency Crisil's chief economist D K Joshi was, however, cautious, saying it was too early to cut the GDP growth forecast. He said a lot depended on external factors and the recovery in industrial output.      However, with agriculture output likely to fall below expectations, the government is concerned about its impact on many industry sectors like fertilisers, consumer goods, two-wheelers and tractors and those with direct exposure to agriculture. The FM said the government was working on a back-up plan to bring down the impact of the scanty rains. He said the government had been constantly assessing the situation and closely coordinating with states like Maharashtra, Bihar, Chattisgarh, Madhya Pradesh, Rajasthan, Orissa and Punjab which had been affected badly.      To counter the situation, the government has already assured states of increasing allocations under the National Food Security Mission (NFSM) and the Rashtriya Krishi Vikas Yojana, where there will be flexibility to use the funds provided to meet contingent situations. Besides, the Centre will make an all-out effort to ensure adequate supply of power and diesel to farmers in distress to help them exploit groundwater resources to the maximum, a finance ministry official said.