According to India Ratings, the country's agricultural growth came to the rescue as without it, GDP growth rate for this financial year would have been much lower.
Indian economy, which has been witnessing a growth slowdown since FY'12, is expected to grow at 4.9 per cent in the current financial year, well below its potential and last 10 years trend growth rate of 7.9 per cent, India Ratings said.
"But for higher agricultural growth due to favourable monsoons, the GDP growth during FY'14 would have been even lower," it said and added that it expects the agricultural sector to grow at 4.5 per cent in this fiscal as against 1.8 per cent in 2012-13.
In the 2013 monsoon season (June 1 to September 30), the country received 6 per cent higher rainfall than the long period average.
"This is clearly good news not only for kharif crops but also for rabi crops as water storage in 85 important water reservoirs (as on August 29, 2013) was 35 per cent more than last year," it said.
However, industry remains a drag for the economic growth.
According to India Ratings, industrial growth in FY'14 is likely to be 2.2 per cent, lower than 3.1 per cent recorded in FY'13.
Moreover, the services sector which was the bellwether of growth and had recorded double-digit growth from FY'06 to FY'10 is also facing "heat".
The services sector has begun dwindling since FY'11, it said.
India Ratings expects the sector's growth to slow down to 6.3 per cent y-o-y in FY'14 from 6.6 per cent y-o-y in FY'13.
"As the largest sector of the economy, it has been quite resilient in the past. Even during the year of global financial crisis (FY'09), when the overall GDP growth of India fell down to 6.7 per cent, it grew at 10 per cent," it said.
Although the services sector continues to be the fastest growing sector of the economy, it is also facing heat due to its strong linkage with the agricultural and industrial sectors on the domestic front and the economies of US and EU on the external front, it added.