The Narendra Modi-led NDA government had assumed office in May 2014.
The forecast shows economic growth slowing to 6.5% in the year to 31 March from 7.1% in the previous year, but it assumes that the economy is on a recovery path.
After the official data were released by the Central Statistics Office (CSO) at a press conference, Chief Statistician T C A Anant said, "Implicit calculation suggests H2FY18 growth will be 7%".
As per the data, the Gross Value Added (GVA) at basic constant prices (2011-12) is anticipated to increase from Rs 111.85 lakh crore in 2016-17 to Rs 118.71 lakh crore in 2017-18.
The estimates form a key input for the Union Budget 2018-19, scheduled to be presented on February 1. The GDP was 7.1 per cent in 2016-17 and 8 per cent in the preceding year. The expenditure method is the more common approach and is calculated by adding total consumption, investment, government spending, and net exports.More news: Natalie Portman Shades 2018 Golden Globes for 'All Male' Best Director Nominees
The slower growth projection also casts doubts over the government's ability to meet its 3.2 per cent fiscal deficit target for the financial year, as slower growth would also mean slower tax generatoin for the government exchequer.
According to Department of Agriculture and Cooperation's data, the production of food grains during the Kharif season of agriculture year 2017-18 was 134.67 million tonnes as compared to 138.52 million tonnes during the same period in 2016-17.
The growth in manufacturing sector too is expected to decelerate to 4.6 percent this fiscal, down from 7.9 percent in 2016-17. Most of the economist echo the view that the economy will grow at lower levels in the range of 6.5 to 6.7 percent. The CSO estimate is lower than the 6.7 pc growth forecast of the Reserve Bank of India. This is less than half of the last year's growth rate of 4.9%. Electricity and trade, hotels sectors are the only sectors that will grow at a faster rate of 7.5% and 8.7% in FY18 than in FY17.
Ahead of the GDP advance estimate numbers, India benchmark equity indices closed at record closing highs, posting their fifth consecutive weekly gain, as financials and metal stocks rose tracking global markets on strong economic data.