India economy to grow at 5.6% in 2014-15: India Ratings

India is likely to grow by 5.6% in 2014-15 against a projected growth of less than 5% in the current fiscal, a report by India Ratings and Research has 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% 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%. This is good news for centre as well state government finances," it added.

The rating agency also expects merchandise exports to grow by 8-10% in the next fiscal year.

It expects a minor slippage in consolidated state deficit from the budgeted FY14 estimate.

"Aggregate state's fiscal slippage in FY14 is estimated at 0.1% of GDP. Consolidated state fiscal deficit in FY14 is likely to 2.3% 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% of GDP from budget estimate of 21.5%.

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.