India is unlikely to achieve a growth of more than 6 per cent in 2002-03 due to structural constraints, despite marginal pick-up in domestic and export demand and improved global conditions, the credit rating agency ICRA has said in its recent issue. "In any event, with little progress on relaxing the structural constraints within which the economy functions, we can hope for little better than the basic 5-6 per cent," ICRA said .

"Even with some pick up in domestic and export demand for manufacturers, expansion of services and improved global conditions, anything more than 6 per cent will be difficult to come by," ICRA said.

The credit rating agency, however, said if the rate of Foreign Direct Investment inflows improved and the new openness was leveraged into greater overseas participation in investment, conditions would be created which are conducive for influencing positive change in the regulatory environment in the subsequent fiscal years. "Given this year's huge agricutlural outturn, the law of averages demands quiescent agriculture in the next," it said.

But ICRA said government finances continued under strain weighted down by 'unreconstructed' expenditures, which could not be supported by available tax revenues.
"The finance of state governments are cause for greater concern, not just because of their size of on-budget and off-budget debt and its servicing costs in proportion to their revenues, but because most public services are provided by these governments," it pointed out. Bureau Report