An SBI reserach report that was published on November 12 sharply cut the country's GDP growth forecast to 5 percent for FY 2019-20 from the earlier projection of 6.1 percent.
The second quarter GDP growth rate is likely to slip to 4.2 percent on account of low automobile sales, deceleration in air traffic movements, flattening of core sector growth and declining investment in construction and infrastructure, according to Ecowrap -- the report from the Economic Research Department of State Bank of India (SBI).
The report, however, said the economic growth rate will pick up pace in 2020-21 to 6.2 percent.
To propel economic growth, it said, the Reserve Bank of India (RBI) may go for "larger rate cuts" in December monetary policy review.
Last month, while reducing the key policy rate (repo) by 25 basis points for the fifth time in a row, the RBI had also reduced its growth forecast to 6.1 percent for 2019-20 from 6.9 percent.
Meanwhile, the SBI research report said, "We are revising our GDP forecast for 2019-20 to 5 percent from 6.1 percent earlier."
India's GDP growth had dipped to about a six-year low of 5 percent in the first quarter of the fiscal.
"We expect Q2GDP growth at 4.2 percent. Our acceleration rate for 33 leading indicators at 85 percent in October 2018 is down to just 17 percent in September 2019, with such decline gaining traction from March 2019," the report said, while terming the decline in September IIP by 4.3 percent as "quite alarming".
Ecowrap further said that the growth rate in 2019-20 "should be looked" through the prism of synchronised global slowdown (countries have witnessed 22-716 basis point decline between June 2018 and June 2019, and India cannot be isolated!).
"India is also significantly lower in Economic Uncertainty Index when compared globally!
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