New Delhi, Aug 17: India's economist Prime Minister Manmohan Singh does not have much faith on global rating agencies, specially when they cast bleak picture and he expects India's GDP to expand 6.5% in 2012.

However, his economic advisory panel headed by noted economist and ex-central bank governor C Rangarajan revised the growth forecast downward to 6.7% for FY13 counting factors like weak agriculture growth and global head winds.

Panel's earlier forecast was 7.5-8%. Panel's latest projection is still way higher compared to 5.5 to 5.8% growth projected by rating agencies.

Advisers to the prime minister issued a stern warning to the government on Friday on the need to rein in the country's fiscal and current account deficits to avoid the risk of a credit ratings downgrade to junk status.

The panel urged the government to cut subsidy burden by increasing subsidized diesel prices and adopt measures to attract foreign investment.

Highlighting the major concerns, the panel said that fiscal deficit is a major worry. However, it would be almost impossible the Congress led UPA coalition government to do so, as it is going to polls in several states by year end.

India could be first among emerging economies to lose its investment grade rating if it did not control the fiscal and current account deficits, said global agencies Fitch Ratings and Standard & Poor's Ratings Services.

In an advisory note the panel urged government to raise tax revenues, including by collecting unpaid taxes.

India's current account deficit rose sharply to $21.7 billion or 4.5% of GDP in the March quarter.However, Advisory panel said that it could narrow to 3.6% by end FY13 on the back of lower import bills for oil and gold.

But panel chief C Rangarajan said the deficit needed to shrink to 2.5 percent. Above that level the rupee comes under pressure, a panel member said.

For the fiscal 2012-13 it raised the inflation forecast to 6.5-7%, up from an earlier forecast of 5-6%, counting Monsoon failure and price pressure.