Despite the government’s recently announced measures to stimulate economic growth, rating agency Fitch slashed its forecast for Indian GDP growth from 6.5 per cent to 6 per cent for the current year.

Expressing concerns over the country’s economic conditions, Fitch slashed the country’s GDP growth forecast by 0.5 per cent, and pegged the government deficit at 8.5 per cent of the GDP.

The rating agency said that the government's economic & investment policy was weighing down on business confidence in the country.

Revising its forecasts for the GDP growth, Fitch said in a statement, “The authorities' ability to respond with looser policy is constrained by India's high inflation, fiscal deficit and public debt.”

Separately, Moody's Investors Service warned that India’s credit profile will not improve despite the recent measures, and that the country’s fiscal deficit would surpass 5.1 per cent level in the fiscal year of 2012-13.

It also revised its growth forecasts for major advanced economies by 0.2 per cent to 1 per cent and 0.3 per cent to 1.4 per cent in 2012 and 2013 respectively. Expectations for the Euro region were revised down to 0.5 per cent contraction for the current year and merely 0.3 per cent growth for the next year. Growth forecasts for the US economy were left unchanged at +2.2 per cent.