Last year Goldman Sachs predicted a 6.5% growth for India in 2013. This seems a bit far fetched considering that India's GDP growth in Q3 of 2012-13, at 4.5 per cent, was the weakest in the last 15 quarters (see graphic). Goldman Sachs was it at the prediction game again citing 5 reasons for gradual pickup in India's GDP growth including the upcoming general elections and expected fiscal stimulus; expected lower interest rates to stimulate economic activity; Policy, reform push to fast-track projects; Global economy acting as a tailwind; supposed green shoots emerging in activity data. Clearly the analysts at Goldman Sachs while certainly highly educated are naively out of touch with ground reality of the Indian political scene.
More recently, ratings agency Crisil on Monday April 15th cut its 2013-14 GDP growth forecast for India to 6% from 6.4% citing weak consumption demand, stubborn lending rates and the impact of policy delays on growth which is much closer to ground reality.
