NEW DELHI, July 7 (UPI) -- India needs to rein in inflation and boost agriculture to maintain 7- to 8 percent growth over the next five years, a government report warns.
The pre-budget economic survey also warns interest rates, now at three-decade lows, may increase because of the deficit and growing loan demands from industry.
The annual report said prices of non-oil commodities, crude oil and capital inflows might affect monetary conditions.
"With fiscal deficit remaining high and signs of a pick up in the flow of credit to the commercial sector, the possibility of interest rates moving northwards cannot be ruled out," it said.
Last month a government report said India's economy grew by 8.2 percent in the fiscal year to March 2004.
Growth, balance of payment and inflation seemed resilient, the survey said, a combination that could offer consolidation of the growth momentum with continued macro-economic stability.
