Poor monsoon could slow India's growth to 5.6-6%: Citi

Indian economy could see a slower growth at 5.6-6 per cent in the current fiscal if the monsoon remains poor, global financial services major Citi has said.

The estimate is much lower than Citi's earlier growth projection of 6.4 per cent for India, which saw its economic expansion touch a nine-year low of 6.5 per cent last fiscal.

"A poor monsoon could result in GDP coming in at 5.6-6 per cent," Citi said in a report on Thursday.

The cumulative rainfall in June was about 30 per cent lower than normal.

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"Despite the changing composition of gross domestic product (share of agri at 15 per cent against 30 per cent) and mitigating factors such as National Rural Employment Guarantee Act, growing share of winter crop, use of gold as collateral, the economy is not yet water-proof," the report noted.

About 50 per cent of workforce is into agriculture and only 36 per cent of the country's land is irrigated.

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After clocking 8.4 per cent growth for two consecutive financial years, Indian economy expanded just 6.5 per cent in the last fiscal.

"As is well known, the interplay of the four deficits (current account, fiscal, liquidity and governance) has taken its toll on the India story with growth slowing to a nine-year low," Citi said.

According to the report, small fuel price hikes, coupled with measures that are largely execution in nature, could make the environment conducive for investment.