After Reserve Bank of India (RBI) and few others, the global ratings agency CRISIL too has raised concern on India's growth outlook and had cut country's real gross domestic product (GDP) growth forecast for 2012-13 to 5.5 per cent from its earlier forecast of 6.5 per cent. In June too, CRISIL had scaled down its estimate for GDP growth to 6.5 per cent from an earlier 7 per cent. Another global ratings agency Fitch, too has revised down its real GDP forecasts to 6.5% and 7.0% from the earlier 7.5% and 8.0% in FY13 and FY14, respectively.

Earlier, the RBI, on July 31 in its first quarterly monetary policy review reduced the GDP forecast for the current financial year from 7.3 per cent to 6.5 per cent and hiked the inflation forecast from 6.5 per cent to 7 per cent. Though, it was still on the optimistic side but CRISIL's forecast is one of the lowest estimates. It has also raised inflation projection for 2012/13 to 8 percent from 7 percent, factoring in the impact of a bad monsoon, which would raise food prices. As per its 'Insight on macro-economic outlook revision 2012-13' it has factored in the adverse impact of rainfall deficiency and worsening of the euro-zone growth outlook.

Not only this, giving another blow to the government, the rating agency has also cut the outlook for India's vast retail sector from stable to negative and warned that spending was unlikely to pick up unless consumer price inflation comes down significantly and consumers receive a 'significant raise in real wages.'