On Thursday, Moody's Investors Service cut gross domestic product (GDP) forecast for India from the earlier estimated 6.2 percent to 5.8 percent for the financial year 2019-20. The credit rating provider said that the deceleration was on account of an investment-led slowdown than broadened into consumption.
"What was an investment-led slowdown has broadened into consumption, driven by financial stress among rural households and weak job creation. A credit crunch among non-bank financial institutions (NBFIs), major providers of retail loans in recent years, has compounded the problem," it said.
It expects growth to pick up to 6.6 percent in 2020-21 and around 7 percent over the medium term.
It also diminished the probability of sustained real GDP growth at or above 8 percent.
For the first quarter of the current financial year, India had reported its GDP growth at 5 percent, the slowest in 6 years.
Last week, after the monetary policy committee meet, the Reserve Bank of India (RBI) cut the country's growth forecast for 2019-20 from the earlier estimated 6.8 percent to 6.1 percent.