PM econ panel lowers GDP estimate to 5.3 pct for FY14

NEW DELHI (Reuters) - India's economy is expected to grow at 5.3 percent in the current fiscal year, the prime minister's economic advisory panel said on Friday, sharply lower than an estimate of 6.4 percent it made earlier this year.

The Prime Minister's Economic Advisory Council also said containing the fiscal deficit within the budgeted target of 4.8 percent of GDP could be a challenge.

The new growth estimates are in line with projections of the central bank and many private economists, who expect Asia's third-largest economy to grow at around 5 percent.

India's economy grew at 4.4 percent in the three months to June -- the slowest quarterly rate since the global financial crisis -- hurt by a contraction in mining and manufacturing.

The panel said inflation for the current fiscal year is expected to be 5.5 percent, lower than 6 percent last year.

(Reporting by Manoj Kumar and Rajesh Kumar Singh)