Around six months or so back, the prevailing consensus was that India would be affected by the global crisis, but growth wouldn’t slip below 7%.

Now that’s more or less the official rose-tinted-glasses view. Then we thought that 6% marked the lower limit—after all, the Indian economy has gone through a structural transformation, we surely couldn’t go back to the bad old days.

Now, several forecasters say GDP growth in 2009-10 will be nearer 5%, while one broker puts it at 3.5%, calling it its “base case".

The table shows some of the recent forecasts of a few research outfits. As can be seen, they cover a wide range.

Also See Lowering Estimates (Graphic)

Most of them predict that growth will slow further in fiscal 2010 (FY10), simply because growth in the first half of the current year, at 7.6%, has been pretty robust.

A forecast of 5.5% for fiscal 2009 presumes that growth in the second half will be as low as 3.4%, which is not a call that most researchers are willing to make, although there are several telltale signs that economic conditions have worsened sharply after September, as seen from the Purchasing Managers Index reports and from the reports on sales of vehicles.

The credit crunch started being felt in India only since October. The fall in exports too has just started.

As Goldman Sachs Group Inc.’ Tushar Poddar has put it, “We now see further risks to the downside as problems in the financial sector feed through to the real sector… Corporates will be the most affected, and as a result, investment demand will suffer the most, followed by external demand, and finally by a slowdown in consumption." Nomura Financial Advisory and Securities (India) Pvt. Ltd believes that fixed investment growth will slump to 2.5% in FY10.

What are the differences between the optimists and the pessimists? There’s not much difference between the forecasts for agricultural growth, which is as it should be, since nobody can predict what the rains will bring.

But First Global has a very low rate of growth for agriculture in the current year. And although there are differences in the range of manufacturing growth, the real difference is between those who believe that services growth will hold up relatively well and those who think that it too will follow manufacturing down into the dumps.

Interestingly, India’s GDP growth rate fell to as low as 3.8% in 2002-03, during the last downturn after the dotcom bust.

Since then, savings and investment rates have gone up considerably, which is perhaps why most research houses do not foresee growth rates dropping to that level. Says Ajit Ranade, chief economist with the Aditya Birla Group, “Even if the savings rate dips from 35% to around 30% due to decrease in corporate savings, lower energy and fertilizer prices will provide enough headroom for the government to provide a fiscal stimulus."

But he believes that could happen only after the next general elections.

The problem is that this time it’s not only a cyclical slowdown, but also a global crisis. So far, however, almost all forecasts predict that structural improvements (like the higher savings rate) will offset the impact of the global shock.

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Graphics by Sandeep Bhatnagar / Mint