Mumbai, Aug 7: India is heading towards classical Hindu growth rate, at least if we go by CRISIL Research projection of 5.5% for FY13.

India’s largest independent research house has revised India’s real GDP growth forecast downward 5.5% from its June estimate of 6.5% for the fiscal, as the Monsoon failure might push agri-economy's growth backward added by uncertainties on external front.
 
CRISIL Research has revised the inflation projection upward to 8% for the year from 7% forecast earlier, as the overall foodgrain production in Kharif season is expected to fall below normal.  

Crisil in its report said that the downward revision in India’s growth forecast factors in the adverse impact of rainfall deficiency, an expected deficiency of 15% for June-September 2012, and negative 0.6% growth forecast for the Euro zone.

Crisil said, "We now expect the fiscal deficit to worsen to 6.2% of GDP in 2012-13 from our earlier estimate of 5.8%."

This is mainly because of lower revenue growth projection as a result of slowing GDP growth, said the Rating agency adding further that it could worsen further if drought forces govt to announce stimulus packages.

Counting factors like debt crisis in Eurozone and slow export growth, Crisil expects the Rupee to settle around 53 per US$ by March-2013 compared to earlier forecast of 50 per US$.

Crisil noted in its report that the downward revision of growth forecast is on assumption that the stretched fiscal situation will limit the ability of the government to give a generous stimulus to the economy. If it does so, then growth will go up but so will fiscal deficit.

It further notes that high inflation will not allow the central bank to aggressively adjust monetary policy infusing liquidity by cutting rates.