India's 2015-16 GDP outlook revised downwards to 7-7.5%

India's GDP is likely to grow at 7-7.5% in 2015-16, lower than the earlier 8.1-8.5% predicted, according to the Mid-Yaer Economic Review tabled in the Parliament. 

The growth outlook as been brought down mainly on the back of lower agricultural output on deficit rains. 

The GDP growth, projected in the Mid-Year Economic Review of the Economy tabled in Parliament, is broadly in line with 7.4% growth projection of the Reserve Bank of India.

The report also said that retail inflation is expected to be well within the Reserve Bank of India's target of 6%.

It said the decline in nominal GDP growth will pose a challenge for meeting the fiscal deficit target of 3.9% of GDP.

"Slower-than-anticipated nominal GDP growth will itself raise the deficit target by 0.2% of GDP," it said, adding that "the anticipated shortfall in disinvestment receipts, owing to adverse market conditions for a portfolio that largely comprises commodity stocks, will add to the challenge."

While tax collections have been buoyant relative to the growth, "indirect taxes have fared better than direct taxes, probably because corporate profits have not been buoyant, reflecting the slowing nominal GDP growth," it said.