"These headwinds are likely to keep the growth mix skewed towards consumption and away from investment," the report said, adding the elections "worsen the outlook" for fresh investment.
The report seemed to suggest that the brokerage is not "too pessimistic" with its estimate of 6.8% growth in FY20 made public in December as against around 7% in FY19. It can be noted that the RBI has pegged FY20 growth at 7.4%.
It said consumption stimulus in the budget is likely to add 0.4 percentage points to GDP growth, but the cut in public capital expenditure will shave off 0.2 percentage points.
"Monetary accommodation of fiscal stimulus effectively neuters the crowding out of private investment through the interest rate channel. However, upcoming elections will worsen the outlook for fresh investment," it said.
Elaborating on elections, it said we can expect investment growth to gradually gain some of its lost momentum from October 2019, when short-term political uncertainty ebbs and easier monetary policy starts to have a positive impact.
On oil, it said the crude prices are gaining momentum and pegged the benefit at only 0.1 percentage point.