Mumbai: Global investment bank Morgan Stanley today blamed a misguided policy approach focused on consumption for the steep fall in the growth momentum, while scaling down its FY13 growth forecast to 5.8 per cent, the lowest estimate so far.
The New York-headquartered bank has cut its growth forecast from the earlier 6.3 per cent for the current fiscal citing a 'bad growth mix'.
Explaining the 'bad growth mix', bank's chief economist for Asia Pacific Chetan Ahya said the much-talked about consumption story is being supported by a high fiscal deficit, while elevated rates have resulted in a decline in private investments, which is "not sustainable".
In FY14, Ahya said improvement in the overall global macroeconomic situation will lead to the domestic growth improving to 6.6 per cent.
Official data released last week pointed to the March quarter growth slowing down to the lowest in nine years at 5.3 per cent and the full fiscal growth
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