Moody’s Analytics, the research division of the global rating agency, in its latest outlook on Indian economy has said there are not much signs of recovery in the country’s economic growth in the second half of the financial year and has slashed India’s GDP growth to 5.5% for 2013 and 6% for 2014.Maintaining that the domestic economy grew below potential in H1 2013, Moody’s Analytics added that even as the government raised FDI limits in certain sectors, reforms have been stalled with no major changes expected before elections next year.

"RBI is unlikely to cut interest rates again; the government is paralyzed by a weak parliamentary position and by the coming 2014 election; local confidence is down; and foreign investor sentiment has turned against India," said Moody's Analytics senior economist Glenn Levine. He added, “The economy grew at rates well below its potential in H1 of 2013, and little appears likely to lift GDP growth into the next year. The slowdown that began with a downturn in fixed investment and manufacturing will soon spread to services and the rest of the economy.”

The report noted that other parts of the economy are also weak. “Auto sales, a key gauge, have fallen for six straight months and were down 9% in June, while commercial vehicle sales were off 13.5 per cent. Imports have also stalled, growing just 1.9 per cent in June,” said the report.