India lowered its official growth forecast to between 5.7% and 5.9% for this fiscal year the finance ministry's mid-year economic review said on Monday but said it was on track to meet a fiscal deficit target of 5.3%.

The budgeted forecast for GDP growth in the 2012/13 fiscal year was 7.6% but growth was just 5.4% in the first half of the year. Finance minister P Chidambaram recently projected growth of between 5.5% and 6% for the year.

The government has struggled to contain the deficit which has swelled because of costly oil subsidies and sluggish tax revenues prompting global ratings agencies to warn of a possible credit downgrade.