Due to higher inflation and lower IIP numbers, the growth rate for India can slip to 7.7 percent this year. It has been forecasted by the top government officials. The growth rate was 9 percent last year and it was forecasted 8 percent by the economic advisory committee of PM Mannohan Singh earlier.

The slowdown in growth rate is due to high oil and food prices, global turbulence and tight monetary policy by the Reserve Bank of India. Several measures by the government to tame inflation have become major causes of economic slowdown.

The council also warned the government on subsidy issues. The government is providing huge subsidy on petroleum products and fertilizers. These subsidies causes heavy loss to state exchequer and economic liabilities are expected to reach 5 percent of gross domestic product due to these subsidies.

The council also expected slowdown in agricultural growth during the current fiscal. It was recorded 4.5 percent during last year and technical experts expect the growth rate to come down to just 2 percent this year.

Similarly, the industrial growth rate may also slowdown to 7.5 per cent which was recorded 8.5 per cent last year.