It cited better-than-expected GDP growth in the September quarter and stabilisation in non-agriculture growth indicators for revising its outlook.
More encouraging news came when HSBC's monthly survey of purchases released on Monday also showed a strong pick-up in new orders in the country, indicating a rebound in the manufacturing sector. The HSBC India Manufacturing Purchasing Managers' Index (PMI) — a measure of factory production — rose from 52.9 in October to 53.7 in November, the fastest rise in five months.
However, an undercurrent of concern is still there in the economy. Global credit rating agency Fitch warned on Monday that declining growth could result in India's rating downgraded to below the investment level. It said while the reform proposals, were potentially growth-supportive, they needed time to work and also faced political risks to their implementation.
Last week, global investment bank Goldman Sachs also came out with a positive outlook for India, and projecting the economy to grow by 6.5% in the calendar year 2013, thanks to an ongoing reforms push to encourage foreign investment.
Industry leaders were however cautious, and inclined to seek lower interest rates. “Monetary intervention would be critical to boost further investments,” said Chandrajit Banerjee, director-general, Confederation of Indian Industry.Morgan Stanley retained its 2013/14 growth estimate at 6.2%.