Industry body Assocham has revised slightly downwards its forecast on the GDP to 7.1 per cent for the current fiscal on account of slowdown in exports and industrial production.
According to the Assocham Business Barometer survey of 250 CEOs, about 80 per cent projected GDP growth for 2008-09 at 7.1 per cent from the earlier 7.6 per cent, with strong waves of negative economic sentiment.
A two per cent decline in the growth rate for 2008-09 from the previous year can trigger a further slump in the economic activity that could pose serious threats of a slowdown in the forthcoming fiscal, it said.
"The outlook for the fiscal 2009-10 is seen as even worse with the growth projections made at 6.5 per cent as the effect of job cuts, negative production growth rate and stagnant US and EU economies would be felt on the Indian economy," Assocham secretary general D S Rawat said.
The survey added that on account of a slowdown in agricultural growth in the first half of the fiscal at 2.9 per cent, compared with 4.5 per cent in the same period last year, the growth has been revised at 3.9 per cent.
Over 80 per cent of CEOs said manufacturing sector, which has witnessed a negative growth of 1.2 per cent in October, would take double hit from the rapid slackening of domestic demand and heavy shrinkage in new export orders.
Services sector which recorded an average growth rate of 10.7 per cent in last three years is expected to deteriorate to below 9 per cent growth rate mark, it said.
However, about 64 per cent of the respondents said the interest rate cuts by the RBI will help in lifting the GDP growth.