Indian leading credit rating and research company CRISIL Limited Monday cut India's GDP growth forecast to 7.6 percent from earlier forecast of 7.7 to 8 percent in the current fiscal year ending March 31, 2012.
The lower projection is in view of the deteriorating global economic scenario and the grim investment climate in India on account of monetary tightening, said a report by CRISIL.
Still, the latest projection is based on assumed slowdown of developed economies but not recession, said the report.
The sharper-than-expected deceleration in developed economies and weak domestic investment climate are impacting Indian growth prospects, according to Roopa Kudva, managing director and CEO of CRISIL Limited.
Indian industry is expected to grow by 6.5 percent in current fiscal year from earlier prediction of 7.3 percent, resulting from adverse impact of interest rate hikes and regulatory hurdles in the mining sector.
Kudva said, "The slowdown in the industrial sector is expected to spill over to services, and will affect sectors such as trade, hotels and investment-led services like banking."
Indian headline inflation from April to August 2011 was 9.6 percent, higher than 9.1 percent in previous fiscal year, according to the report.
CRISIL also said that if there is no double dip in advanced countries, inflows of foreign institutional investors may pick up in the early part of 2012, as risk appetite for investment in emerging markets will return./.