"We are currently pencilling in a pick-up in growth from Q4 of FY13 aided by better global demand and a pick-up in government spending ahead of elections...we remain comfortable with our below consensus GDP growth forecast of 5.6 per cent in FY14," its economists said in a note.

The report said the non-agriculture growth fell to 5.2 per cent in the December quarter, down from 5.8 per cent in the preceding quarter and is unlikely to recover.

"Activity data have been mixed with a rebound in January industrial output, but disappointing auto sales in February. Our composite leading index for the country, which has a two-quarter lead over the non-agriculture GDP, points to a prolonged bottoming-out, rather than a recovery," it said.

However, the report said this is not surprising as economic momentum has decelerated sharply at a time of weak external demand and limited space for monetary or fiscal stimulus.

Nomura added that the reforms undertaken in the recent past will have a "meaningful impact only after a lag".

According to the government estimate, GDP will grow by a decade low of 5 per cent in this fiscal, while the budget presented by Finance Minister P Chidambaram has targeted a GDP reading of 6.1-6.7 per cent for FY14.

PTI