India Ratings sees GDP growing at 5.6% next fiscal

India's economy is likely to grow by 5.6 per cent in 2014-15 against a projected growth of less than 5 per cent in the current financial year that ends this month, a report by India Ratings and Research on Thursday said.

"The global economy in 2014 appears to be in a better shape than what it was in 2012 and 2013. India Ratings forecasts India's GDP to grow at 5.6 per cent in 2014-15," the rating agency said.

"The economic growth in FY15 is likely to be contributed majorly by the industrial sector, which is estimated to grow by 4.1 per cent. This is good news for centre as well state government finances," Ind-Ra added.

It also expects merchandise exports to grow by 8-10 per cent in the next fiscal year.

It expects a minor slippage in consolidated state deficit from the budgeted FY14 estimate. "Aggregate states' fiscal slippage in FY14 is estimated at 0.1 per cent of GDP. Consolidated state fiscal deficit in FY14 is likely to 2.3 per cent of GDP vis-a-vis 2.2(BE)," the report said.

It further said that state governments' debt in 2013-14 is estimated to increase marginally to 21.7 per cent of GDP from the budget estimate of 21.5 per cent.

The agency, however, said that it maintains a stable outlook on state government finances for the next fiscal.

"India Ratings maintains a stable outlook on state government finances for FY15 as it expects consolidated state finances to remain resilient to the on-going economic slowdown,'' the rating agency said.