Despite the fact that the widespread recession has notably slowed down India's economy, the CII - Confederation of Indian Industry - has forecast that the country's gross domestic product (GDP) would likely grow to between 6.1 percent and 6.5 percent during the ongoing fiscal year.

Putting down its projections in its recent report on the 'State of the Economy,' CII projected a 6.1 percent GDP growth, in a base-case situation, for 2009-10. Elaborating on the reasons, the apex chamber cited plunge in interest rates; moderation in the prices of essentials like food and fuel; and a drop in indirect tax rates.

The CII report said: "We are factoring in GDP - gross domestic product - growth of 6.1-6.5 per cent in 2009-10, based on sectoral growth rates of 2.8-3 per cent, 5-5.5 per cent and 7.5-8 per cent, respectively for agriculture, industry and services."

The report made a mention of a sharp drop in sales during the January-March 2009 quarter, after analyzing the financial performance of 324 companies - 173 in the manufacturing and 151 in the services sector.

Nonetheless, noting that the rather good performance of the agricultural sector has resulted in a robust rural demand, CII Director General Chandrajit Banerjee said that the fact that rural demand largely remained unmoved by global developments was an encouraging aspect of the Indian economy.