India economic adviser slashes GDP growth estimate for 2013/14 to 5.3 percent NEW DELHI (Reuters) - India's economy is expected to grow 5.3 percent this fiscal year, the prime minister's economic advisory panel said on Friday, sharply lower than an earlier estimate of 6.4 percent but higher than last year. The revised forecast is roughly 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, the same level as in 2012/2013. A pick-up in automobile production and exports in August indicated that the manufacturing sector would do better in the second half than the first, said C. Rangarajan, the chairman of the Prime Minister's Economic Advisory Council. "Taking these factors into account, the forecast growth rate appears reasonable," Rangarajan said. India's industrial production unexpectedly rebounded in July while consumer inflation cooled last month, offering some relief for policymakers who have been battling the country's worst economic crisis in more than 20 years. The rupee has fallen nearly 14 percent against the dollar so far this year, hitting a record low last month, as the economy struggles with decade-low growth, a record current account deficit and a steep fiscal shortfall. The advisory council also said that containing the fiscal deficit within the budgeted target of 4.8 percent of gross domestic product could be a challenge. Finance Minister P. Chidambaram has said the target will not be breached. "My fiscal deficit estimate is now 5.5 percent, but it all depends on how Chidambaram manages it," said Anjali Verma, chief economist at PhillipCapital. He can go back to slashing planned spending like last year. Rangarajan also said the current account deficit could be lower than the $70 billion that the government is targeting if current trends in exports and imports continued, citing data showing the trade deficit had narrowed in August. However, a large part of the smaller trade gap was due to a $2.25 billion fall in gold imports, which are expected to rebound over the next few months as India's wedding and festival seasons kick in. India's economy grew 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 was expected to be 5.5 percent, lower than the 6 percent recorded in the last fiscal year. Reporting by Manoj Kumar, Rajesh Kumar Singh in New Delhi and Subhadip Sircar in Mumbai, writing by Krishna Das; Editing by Ross Colvin and Kim Coghill