India to grow at 7.4 per cent in FY15-16; more rate cuts in pipeline: report

New Delhi: India is likely to grow at 7.4 per cent this fiscal, slightly lower than the earlier estimate of 7.6 per cent, stated a DBS report. The Reserve Bank may go for 50 bps more rate cuts amid slower growth  and faster than expected pullback in inflation.  According to the global financial services major, upturn  in growth for the Indian economy would be more gradual, with  the consumption and investment turnaround likely to be slower  than anticipated.  "We revise down our FY15/16 growth estimate to 7.4 per  cent (as against 7.6 per cent earlier), inching up to 8 per  cent in FY16/17 (as against 8.3 per cent earlier)," DBS said  in a research note. 

India's GDP growth rate slipped to 7 per cent in the April-June quarter of 2015-16, from 7.5 per cent in the  preceding quarter.  "Against the backdrop of slower growth and faster-than  -expected pullback in inflation, we revise our rate call to  include 50 bps more rate cuts in this fiscal, first of which  is likely this month," the report added. 

According to DBS, inflationary expectations will stay 'tempered' amidst soft commodity prices. It expects the  September-December CPI inflation to average around 5 per cent,  still below the January 2016 CPI target of 6 per cent.  RBI, which has lowered the benchmark rate by a combined 75 basis points so far this year in three instalments, will  hold its next bi-monthly monetary policy meet on September 29.