The Indian economy has grown at its slowest pace in the second quarter of the financial year in more than two years as the central bank in the country follows a strict monetary tightening policy by keeping the interest rates high.

The country's Gross domestic product rose 6.9 percent in the quarter, according to the latest data released by the Central Statistical Office. The growth is the slowest since the second quarter of 2009 but is largely in line with the economist expectations.

The Reserve Bank of India has been trying to control the double digit inflation in recent months by repeatedly increasing its key interest rates in the country. The RBI has increased its interest rates 13 times since March of 2010 in order to control inflation, which remains high.

Analysts say that factors such as high interest rates, certainty about reforms, allegations of corruption and recessionary global conditions have put a lot of pressure on the Indian economy. The falling Indian rupee, which has become the worst performing currency in Asia, has also affected confidence in the country.

Mr Montek Singh Ahluwalia, Deputy Chairman, Planning Commission ha said on Friday that he expects the Indian economy to grow between 7.6 to 8 per cent in the current financial year.

While speaking on the sidelines of an event organized by FICCI, he said that even at the rate of 7.6 per cent, the Indian economy is growing at a speed unmatched in the world.

He rubbished suggestions from the industry circles that the increasing of interest rates by the RBI has affected economic growth by saying that the interest rates stand at a level similar to when the economy was registering a growth of 9 per cent.