Standard Chartered Bank today lowered India’s growth forecast for this fiscal to 5.4 per cent from 6.2 per cent projected earlier despite the recent reforms push.

“We revise our FY’13 GDP growth forecast sharply lower to 5.4 per cent from 6.2 per cent — despite the better-than-expected Q1 FY’13 GDP print of 5.5 per cent y/y,” Standard Chartered said in a research note.

The first quarter of this fiscal year saw a GDP growth of 5.5 per cent which was marginally better than expected.

However, going forward India is likely to register sub-5 per cent GDP growth in the forthcoming quarters for the rest of the fiscal.

According to the report, the series of recently announced government reforms will contain the fiscal deficit and increase foreign participation in selected sectors but “India’s macro backdrop remains challenging’’.

“While these measures will have a positive medium-term impact and will change the perception of policy paralysis in India, they may not have an immediate effect on growth. It will be important to maintain the reform momentum in order to put growth back onto an upward trajectory,” the report added.

In big ticket reform measures, the Cabinet Committee on Political Affairs on Thursday had decided to hike diesel prices and put a cap on the supply of subsidised LPG cylinders. On Friday, the Cabinet and CCEA had cleared FDI in multi-brand retail and aviation as well as disinvestment in four PSUs.

The spate of reform measures is likely to change the perception of policy paralysis among investors and rating agencies, and could revive business sentiment and attract equity inflows in the near term, but the reform process should continue, it said.

“The reform process needs to continue, and there is no room for complacency. The government has provided a positive surprise to the market with the latest round of reforms, which change the perception of policy paralysis in India. It is now crucial to keep the reform momentum going so that growth can return to an upward path,” it said.

Earlier this month, Morgan Stanley had also lowered India’s growth forecast to 5.1 per cent for the current fiscal from its earlier estimate of 5.8 per cent and HSBC has cut India’s growth forecast for this fiscal year to 5.7 per cent from 6.2 per cent projected earlier.

According to the report, while industrial growth has stalled, the services sector growth — which has significantly lost momentum, is likely to remain low for a while.

Moreover, the agriculture sector could also suffer from delayed monsoon rains this season.

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