In the last fiscal year, Indian economy grew at a five-year low pace of 6.8 per cent.

Fitch on Monday lowered India's growth forecast to 6.6 per cent for the current fiscal year from 6.8 per cent projected earlier, as manufacturing and agriculture sectors showed signs of slowing down over the past year. In its latest Global Economic Outlook, the global rating agency retained its GDP growth forecast for the next fiscal (2020-21) at 7.1 per cent and 7.0 per cent for 2021-22. In the last fiscal year, the economy grew at a five-year low pace of 6.8 per cent.

"We see growth for FY 2019-2020 printing at 6.6 per cent, before stepping up to 7.1 per cent in FY 2020-2021 and 7.0 per cent in FY 2021-2022," Fitch said.

India's GDP growth declined for the fourth consecutive quarter in January-March, with the economy expanding by 5.8 per cent, down from a cyclical high of 8.1 per cent in the March quarter of 2018.

"This is the lowest growth outturn in five years. The slowdown over the past year has been driven by steadily cooling activity in the manufacturing sector and, to a lesser extent, agriculture. Weaker momentum has been mainly domestically driven, though export growth has also faltered more recently," Fitch said.

It said the Reserve Bank has cut interest rates by 0.25 per cent in its June meeting - the third cut so far this year - in the face of weak growth momentum and contained inflation.

"We expect another 25 basis point cut later in 2019, which will push the policy repo rate down to 5.50 per cent. Monetary and regulatory easing from the RBI, along with a recovery in portfolio inflows, should support a recovery in credit to the private sector and reverse the drag from the negative credit impulse," Fitch added.