Nomura sees no economic growth recovery in sight in India

The report said the non-agriculture growth fell to 5.2 per cent in the December quarter,down from 5.8 per cent in the preceding quarter and is unlikely to recover.

“Activity data have been mixed with a rebound in January industrial output,but disappointing auto sales in February. Our composite leading index for the country,which has a two-quarter lead over the non-agriculture GDP,points to a prolonged bottoming-out,rather than a recovery,” it said.

However,the report said this is not surprising as economic momentum has decelerated sharply at a time of weak external demand and limited space for monetary or fiscal stimulus.

Nomura added that the reforms undertaken in the recent past will have a “meaningful impact only after a lag”.

According to the government estimate,GDP will grow by a decade low of 5 per cent in this fiscal,while the budget presented by Finance Minister P Chidambaram has targeted a GDP reading of 6.1-6.7 per cent for FY14.