India growth forecast slashed: CRISIL

  • Rating agency CRISIL has slashed India’s growth forecast to 5.5%. It is the second cut for fiscal 2013 estimate. Earlier, the agency had cut GDP growth to 6.5%.
  • Deficient rainfall and worsening Eurozone situation are the main causes behind the decline.
  • As per CRISIL, the sluggish growth is expected to put pressure on government finances. Fiscal deficit may also expand to 6.2% of GDP in 2012-13 from the previous estimate of 5.8 %.
  • As per the agency the Indian govt may see a dilemma on whether to provide a stimulus or not because if it infuses the economy with stimulus then along with some boost to growth its fiscal deficit will soar further.
  • Likewise, high inflation will be another hindrance to the RBI in aggressively cutting rates to stimulate the economy.

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