NEW DELHI. Oct 9 : India may experience slower industrial] output growth and have a higher fiscal deficit in the fiscal year to March 1997. an industry body warned Tuesday, reports AFP.

The Associated Chambers of Commerce and Industry (Assocham). representing more than 200 companies, said in a mid-year review of the Indian economy that industrial output growth would drop two percentage points year-on year to 10 per cent in 1996-97.

The slow growth is due to high cost of borrowings, infrastructural bottlenecks, sluggish imports and high cost of crucial inputs such as petrol, power and freight." Assocham Secretary-General V. Raghuraman said.

The report said that In the four months to September, export growth fell to 11 per cent year on-year compared to 28 per cent growth recorded a year earlier.

The report said fiscal deficit targetted at five per cent of the Sjross domestic product (GDP) or 1996-97 may increase to more than six per cent, or 20 billion dollars.

'The trade deficit at 4.5 billion dollars (for 1995-96) is also likely to increase to seven billion dollars in 1996-97.” it said.

Raghuraman said the trade deficit would widen due to massive increase in imports of petroleum products. 'This will put pressure dn the balance of payments."

The mid-year review also forecast inflation would rise to about nine per cent from five per cent in 1995-96.

Industry today is concerned over the continued downtrend of the capital markets while the high cost of bank credit and poor infrastructure are proving to be the bane of economic growth. Raghuraman said.