Data for second quarter GDP is likely to be announced later this week.
"The pace of growth of real GDP at factor cost is expected to be at a lower 5 per cent in second quarter compared to 5.7 per cent in first quarter, on account of factors such as an unfavourable kharif harvest, sluggish manufacturing performance, slowdown in export growth and moderation in the pace of expansion of government spending," the report said.
In terms of the sectoral components, GDP growth would be dampened by a slowdown in agriculture at near 0.5 percent (as against 3.8 percent in first quarter) and in industry at near 2.6 percent (compared to 4.2 percent in first quarter), offset to a small extent by a slight uptick in the services
sector near 6.9 percent.
For the full fiscal, the agency forecasts GDP growth at 5.3-5.5 percent.
Agricultural growth this fiscal is expected to remain below 1.5 percent, which in conjunction with modest rise in MSP, is expected to keep rural consumer sentiment in check, the report said.
With interest rates remaining largely sticky, ICRA expects the manufacturing sector to record a mild growth in FY15.
With tax revenue growth substantially under-performing the budgeted target in first half, ICRA remains concerned regarding the likelihood of either the direct or indirect tax targets being met in FY15.
"Revenue buoyancy will crucially hinge upon the success of the telecom auction and disinvestment offerings in the remainder of this fiscal," the report said.
It said recently announced fiscal prudence measures and savings related to the budgetary allocation for food subsidy and fuel subsidies would ease the pressure on non-Plan revenue expenditure in second half.
Icra believes that some further expenditure pruning may be needed to prevent a slippage relative to the fiscal deficit target of 4.1 percent for FY15.
"A sharp slippage relative to the fiscal deficit target for 2014-15 is unlikely, we do not anticipate an
enhancement of government's dated borrowing programme for the current fiscal," Icra said.
On rate cut front, expects the RBI to refrain from premature monetary easing in a bid to support growth, despite the lag associated with policy transmission.