Subir Gokarn, a deputy governor of the RBI has said that he expects the Indian economy to grow at around 7.5 to 7.6% in the current fiscal year amid signs of a global economic slowdown.

He acknowledged that the increase in interest rates have affected the growth in the economy. The RBI has been concerned over high inflation in the country and has raised the interest rates 13 times since March last year in order to try to control the high prices of commodities.

The country's industrial output, which is measured in terms of Index of Industrial Production (IIP), recorded a growth of 1.9 percent in September according to the data released on Friday.

The news about a slowing out comes after Moody's Investor Service decided to downgrade the outlook for India's banking system to "negative" from "stable" on Wednesday. The growth of just 1.9 per cent is significantly slower than 3.5 percent growth recorded in august.

Analysts were expecting the growth in September be in the range of 3.6 per cent. The country's manufacturing output rose 2.1 percent in September compared to the same period last year. It accounts for nearly a three-forth of the industrial output. However, capital goods declined by 5.6 percent in the month.