Now, Icra lowers GDP forecast to 5.7%
The agency joins a long list of analysts who have downgraded the country's growth estimates citing similar reasons. The lowest estimate is 5.3 percent, by JP Morgan.
There is an "absence of concrete improvement in investment sentiment", Icra said today, adding, "delays in obtaining regulatory clearances, environmental approvals and issues related to land acquisition continue to dampen investment sentiments".
In June, it had said that GDP will expand by 6.2-6.4 percent.
The unfavourable progress of monsoon will result in a strain on budget calculations, it said today, adding that fiscal deficit target of 5.1 percent is likely to go up to 5.7-6 percent.
The government is also likely to overshoot its borrowing target of Rs 2,000 billion by around Rs 600-900 billion, it said.
The current account deficit situation will improve to 3.7 percent from the last fiscal's record high of 4.2 percent, it said, adding that attracting capital flows is a challenge.
On the monsoon front, the agency said it expects a healthy rabi (winter) crop to offset impact of monsoons on the kharif crop.
Icra has, however, revised upwards its average headline inflation expectation to 7.5-7.7 percent for the fiscal from the earlier 7-7.5 percent. This will limit the Reserve Bank's scope to bring down its policy rates and the central bank is unlikely
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