While he pushed 35,000 crore of oil subsidy payments to next year in the interim budget, the Finance Minister also cut plan expenditure by 75,000 crore to meet the fiscal deficit target which he finally brought down to 4.6 per cent from the planned 4.8 per cent.

According to the agency, this cut back on government spending will negatively impact growth.

Another growth impediment is the high interest rates, which a hawkish central bank has increased three times or a cumulative 75 bps in the past five months.

Nomura said the slowdown in domestic consumption was offsetting the better performance of net exports. The report sees growth to pick up in 2015 on account of higher investments and inflation easing out.

"A revival in the capex cycle and a sustained moderation in inflation are pre-conditions to an economic rebound, which we see as more likely in 2015," Nomura said.

Meanwhile, rating agency Icra said it expects GDP growth to improve to 5-5.5 per cent in FY15 on factoring in a normal monsoon, higher manufacturing growth and a pick-up in investment activity in second half of the fiscal.

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