Mumbai: More economists slashed their economic forecasts for India, with Citigroup and CLSA cutting their outlooks for growth to 5.4% and 5.5% respectively in the fiscal year ending March, with a weak summer monsoon adding to economic headwinds.

A man rides a two-wheeler through a housing construction site in Kolkata. File photo / AFP

Economist Rohini Malkani said in a note that if drought conditions worsen, growth could fall to 4.9%.

The Reserve Bank of India has already cut its GDP projection to 6.5% for 2012-13 from the earlier estimate of 7.3%.

CLSA said it expected the farm sector to be stagnant compared with an average growth of 3% in previous years.

“Unfortunately, the scope for counter-cyclical fiscal and monetary support today is almost non-existent," wrote Rajeev Malik, economist at CLSA.

The central bank has been reiterating concerns over rising food prices alongside a high subsidy bill, which could worsen the fiscal deficit. The summer drought has put a question mark over the government’s ability to raise fuel prices.

On Tuesday, Indian rating agency Crisil slashed its growth forecast to 5.5% for the fiscal year ending March, just two months after pruning its projection to 6.5% from 7%.

It said a weakening euro outlook along with poor rains contributed to the latest cut.

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