Leading ratings agency Crisil today joined its rivals in revising the country's growth forecast for this fiscal downward to 7.5%, citing a lack of reforms and repeated rate hikes on the domestic front, besides weak global economic fundamentals.
The agency had in May projected that India would register an economic growth rate between 7.7% and 8% this fiscal and today's revision comes within a week of Fitch Ratings and Citigroup revising their own forecasts downward to 7.5% from 77% earlier.
"The growth forecast has been scaled down in view of the deteriorating global economic scenario and the grim investment climate in the country on account of the policy environment,"Crisil said in a statement here.
The domestic economy clocked 8.5% growth last fiscal, on the back of which the government had projected a growth rate of over 9% in the Budget. However, it recently revised the estimate downward to 8.2% due to the worsening euro zone sovereign debt crisis and fears of a double-dip recession in the US.
The agency said the slowdown in advanced countries has been"sharper than expected", but maintained that its new estimates are based on the assumption there will be a sharp slowdown in such economies, but not a recession.
On the domestic front, the report blamed the lack of domestic policy reforms, coupled with the repeated rate hikes by the Reserve Bank, as factors hurting growth prospects.
The monetary authority has hiked its key rates a record 12 times over the past 19 months in its bid to tame uncomfortably high wholesale price index inflation, which stood at 9.78% in August.
The ratings agency also raised its average headline inflation forecast for India in FY'12 to 9.1% from 8-85% earlier.
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