Rising incomes to push India's FY'12 GDP growth to 8.8 per cent: CMIE

India's gross domestic product (GDP) is expected to grow at 8.8 per cent in fiscal 2011-12, as the economy continues to remain in a high growth trajectory, according to the latest projections of the Centre for Monitoring Indian Economy (CMIE).

The high growth will be led by rising investment demand, which in turn will be driven by rising consumption demand and investment demand, it said.

With the domestic environment conducive to growth, the economic think tank has projected private final consumption expenditure (PFCE) in the country to grow by a healthy 7.5 per cent and gross fixed capital formation by 14.6 per cent during the fiscal.

Growth in private consumption will be led by rising incomes - both in urban and rural India - CMIE said.

Salaries and wage expenses of corporate India are projected to increase by 14.2 per cent while consumer price inflation will, on the other hand, decline to around 7 per cent levels, due to a moderation in inflation in food articles and textile items, the report said.

CMIE has projected a three to four per cent rise in agricultural output, with foodgrain production touching a record 240.8 million tonnes.