Now, Crisil lowers FY13 GDP growth to 6.5%

The agency also attached a caveat that its new growth projection saying this is contingent on a normal monsoon forecast and no further worsening of the Eurozone crisis. Despite a massive drop in crude prices to the tune of nearly 18%, and a massive drop in global commodity prices, the agency also upped its inflation guidance to 7% from 6.5%.

The agency also upped its fiscal deficit target to 5.8%. "We have lowered the GDP growth forecast for FY13 to 6.5% from its March 2012 estimate of 7%. The forecast has been scaled down in view of the rising downside risks from recession in the Eurozone,muted domestic investment demand, policy logjam, and limited fiscal and monetary space to stimulate the economy," Crisil Research sad in a noted this afternoon.

The agency further argued that "unlike the swift V-shaped recovery from 6.8% growth in the worst phase of the global financial crisis in 2008-09, economic growth will remain flat in 2012-13, the level of 6.5% achieved in 2011-12.

This will make FY13 the second consecutive year of lowest growth in the past decade " Crisil managing director and chief executive Roopa Kudva said.