"Based on quarterly model estimates, the GDP growth for 2012-13 is projected at 5.6 per cent... Our preliminary estimates show GDP growth in constant 2004-05 prices (to be) at 6.1 per cent in 2013-14," National Council of Applied Economic Research (NCAER) said in its report 'Quarterly Review of the Economy'.
It said economic slowdown is evident not only on the production side of the economy but also on the demand side.
The estimates show downward revision of GDP growth rate in the final two quarters, as compared to the previous estimate in October, it added.
"This is mainly due to contraction of output in all three sectors -- agriculture, industry and services. While lower agricultural output is explained by high deficit in rainfall, lower industrial and services output growth are a result of decline in...growth and decline in government expenditure."
However, in 2013-14, it expected that all these sectors would perform better than the previous fiscal year.
The manufacturing sector alone, in the first half of 2012-13 declined steeply to 0.49 per cent, which is a record decline and acts as a severe pull-down factor for the growth of GDP, the report said.
It said services sector has been slowing down and there are indications that the sector will register low growth in the current fiscal year.
Investment and private consumption were significantly contracted during the first half of the fiscal year.
"While the slowing down of consumption will negatively affect the growth in the current fiscal (year), the meagre growth of investment will reduce growth both in the current and in the next fiscal," NCAER said in the review.
Private investment is affected by high domestic interest structure and unsuitable business climate, the private expenditure is suffocated by persistent elevated inflation led by rising input cost, it further said.
The NCAER report said that the positive impact of government efforts to improve business sentiments that began in September may be realised in the third and fourth quarter where the GDP growth rate is expected to improve.
India has registered just 5.4 per cent GDP growth in the first half of 2012-13. In order to achieve the GDP growth rate of more than 5.5 per cent in 2012-13, the economy should expand at least 5.8 per cent in the second half of the year, the report added.
It also estimated upward revision in WPI based inflation.
"The year-on-year increase of WPI prices has been revised upward due to increase in domestic oil prices. We estimate 7.7 per cent WPI inflation for the current fiscal," it said.