INR: growth bottoming out very slowly

FY15 GDP growth, however, was driven by an 18.9% jump in net taxes. More importantly, GVA growth slowed to 6.1% from 6.8% in December. 

GVA slowdown was led by a contraction in agriculture and services, despite a pick-up in industry. Within services, the entire drop was accounted for by a deceleration in government services.

"FY16 GDP is forecasted 7.5% in FY16 from 7.7%. FY17 is projected at 7.9%", says Bank of America. 

Lending rate cuts hold the key to recovery that should be back-ended as it takes about 6 months for rate cuts to support growth.

The RBI cutting 50bp in early 2016 after a long hold assuming a potential September Fed hike as well as a poor monsoon based on the Met's forecast of 88% of normal rains. 

However, with the Fed sounding dovish in its June policy and the rains having surprised up at 125% of average from June 1- 23, the RBI could cut on August 4 if rains continue to improve.