Painting a gloomy picture for the Indian economy, Reserve Bank on Wednesday said the growth moderation may be steeper and more extended than earlier projected.
Higher input costs and dampened demand have dented corporate margins while the uncertainty surrounding the crisis has affected business confidence. At the same time industrial growth has shown negative growth for two recent months and investment demand is decelerating, RBI Governor D Subbarao said in Tokyo.
"All these factors suggest that growth moderation may be steeper and more extended than earlier projected," he said at a symposium organised by the Institute for International Monetary Affairs.
The advance estimates of Central Statistical Organisation projected India's growth at 7.1 per cent for the current fiscal.
RBI, in its third quarter review of the annual monetary policy, also pegged GDP growth at 7 per cent, lower than the previous estimates reflecting a deeper impact of the global economic crisis.