The Prime Minister's Economic Advisory Council (PMEAC) - the government's topmost think-tank - on Friday cut its growth forecast for India in 2013-14 to 5.3%, just above last year's decade-low 5% expansion.
The new forecasts are sharply lower than its April estimates of 6.4%, but PMEAC chairman C Rangarajan said a 5.3% expansion was "still very respectable."
Private sector economists have however, forecast lower growth for India this year. The PMEAC's projections have not always been close to actual growth figures.
Rangarajan said that despite a slowdown, there was no case for credit rating agencies to bring down India's rating, particularly in light of the string of reforms measures that have been taken over the last few months.
"The rating agencies have been talking about the reforms having been put on the back burner. But that is no longer true. Many important legislations were passed (recently) ... Therefore, I would think the rating agencies have no case for any downgrading," he said while releasing the ‘Economic Outlook 2013-14' report.
The report also partly blamed non-economic reasons for the sharp turnabout of India's economic growth from a heady 9%-plus to 5% last year.
"Possibly the larger part of the factors that resulted in the abrupt decline in growth flowed from non-economic factors," the PMEAC said in its report. "These created a climate of uncertainty resulting in hold-ups in projects awaiting clearances and a general deterioration in the investment climate."
Rangarajan said it was important for the Reserve Bank of India to maintain a tight monetary policy until the rupee stabilises.
RBI had taken a raft of measures including making it costlier for banks to borrow, in order to prop up the rupee which last month hit a record low of 68.85 against the US dollar.
Rangarajan said that meeting the fiscal deficit target of 4.8% of GDP in 2013-14 would be a "challenge".