After slew of international credit rating agencies that have flagged concerns over India's growth story, HSBC has now scaled down its economic growth forecasts for India for fiscal 2013 and 2014 from 6.2 per cent earlier to 5.7 per cent on account of 'the lack of reform traction', a more 'challenging' global economic backdrop and expectations the central bank will push back the timing for rate cuts. Further, the bank has also slashed its gross domestic product (GDP) forecast for economy for fiscal 2014 to 6.9% from 7.4%.

Earlier this month, US investment house, Morgan Stanley, citing a combination of weak external demand, low private investment and poor government finances, pruned India's economic growth forecast to 5.1 per cent from previous projected figure of 5.8 per cent in the year ending March. It also reduced its estimate of GDP growth for 2013/14 to 6.1 per cent from 6.6 per cent. Besides, Morgan Stanley has also warned that policy sluggishness could push India's growth further down to 4.3 per cent in the current fiscal year.

Confirming a sharp slowdown in Asia's economy, Indian economic growth languished near its slowest in three years in the June quarter but was slightly better than expected at 5.5 percent.