Two other foreign banks have gone in for downward revision of India's GDP growth prospects for fiscal 2012-13, joining several other foreign firms and brokerages who have in recent days been lowering their estimates.

Goldman Sachs has slashed its India GDP forecast from 7.2 per cent to 6.6 per cent for the fiscal ending 31 March 2013. Bank of America-Merrill Lynch (BofA-ML) also revised its earlier 6.8 per cent forecast to 6.5 per cent.

Three other international firms had earlier revised their estimates for India's GDP growth. Morgan Stanley had earlier in the week cut the GDP forecast from seven per cent to 6.3 per cent; it had also revised the estimates for 2013-14 GDP growth from 7.5 per cent to 6.9 per cent.
 
''We believe that the growth slowdown will be both deeper and more prolonged than what the consensus is expecting with adverse implications for the banking sector,'' said a Morgan Stanley research note. ''At this juncture, we believe that the risks to the growth outlook remain skewed to the downside.''

StanChart bank has revised its forecast from 7.4 per cent to 7.1 per cent in 2012-13, while Citi has been the only international bank to have opted for a marginal upward revision. It has scaled up its GDP estimate for India in the current fiscal to seven per cent, from 6.9 per cent earlier.

However, the government of India, in its economic survey, has predicted a GDP growth rate of 7.6 per cent in the current fiscal. Even the Reserve Bank of India expects GDP to expand at a healthy 7.3 per cent in the fiscal.
 
According to analysts at Goldman Sachs, it chose to cut the GDP estimate to 6.6 per cent from a high 7.2 per cent previously because of a weaker investment outlook and uncertain domestic policies. It has also revised the wholesale price inflation (WPI) estimate to 6.5 per cent from five per cent earlier.

The revision by BofA-ML was influenced by the euro zone crisis, which it feels, could impact the domestic economy. While maintaining that the worst could be over for the Indian economy, the bank feels that there is still much pain left from the crisis.