Stating that there is "uncertainty" on the growth trajectory, a domestic brokerage on Friday cut its FY23 real GDP expansion estimate to 6.3 per cent, among the lowest within the analyst community.

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The estimate is lower than the market consensus of 7.6 per cent, and the RBI's more optimistic 8-8.5 per cent, Motilal Oswal Financial Services (MOFSL) said in a note.

The Reserve Bank of India (RBI) last week maintained its 9.5 per cent estimate for the current financial year. However, the central bank said the country is growing much below its potential and it will take years to close the output gap.

"It is clear that there is more uncertainty regarding GDP growth in India than the inflation trajectory. The inflation forecasts broadly remain unchanged, which are in line with the market consensus and RBI projections," the MOFSL team said while projecting a lower real GDP growth rate as compared to the market consensus.

The brokerage said real GDP growth will slide further to 5.8 per cent in FY24, indicating that there are more challenges in the offing.

However, it expects the RBI to hike the interest rates next year by 0.50 per cent with an eye on the consumer price inflation, which it expects to come at 5 per cent for FY23, after the 5.3 per cent figure in FY22.

The monetary policy normalisation will be more longer than widely expected, it said, justifying that the RBI seems to be putting in more weightage on growth, which seems to be highly uncertain.

The brokerage expects the current account deficit to be at 0.8 per cent in FY23, much below the consensus estimates. It further projects the fiscal deficit of the Union government to narrow down to 5 per cent from the 6.8 per cent in FY22.

The rupee will depreciate and it will be at 76.4 against the US dollar at the end of FY23, it said.