India's growth is slowing down!

Do not rejoice yet at the prospect of the country posting over nine per cent growth in the current fiscal, as some economic think-tanks have revised their growth projections downwards to 8 per cent-8.5 per cent region on grounds of high interest rate and global slow down.

Rating agency Crisil cites the hard interest rate as the main reason for its lower estimate of 8.4 per cent.

"The increasing interest rates would be the main reason behind the slow down in growth rate. International factors, including slump in the US and China, would also affect the domestic growth," Crisil chief economist Subir Gokarn said.

Another economic think-tank National Council of Applied Economic Research has further lowered the projected growth rate at 8.3 per cent. It anticipates a slump in all three major sectors - agriculture, services and industries. The growth in agriculture would be affected because of the expected less than normal rainfall.

NCAER projects 9.9 per cent growth in the services sector as against 11.2 per cent in the last fiscal. Exports growth in May has slowed down to 18.07 per cent from 23.06 last month.

Industry body CII says the growth rate would be only 8.5 per cent owing to a decline in demand in the global and Indian economy, rising inflation and increasing interest rates.

Rupee appreciation and a demand-supply gap in the domestic and global economy can also lead to a decline in the growth rate, the chamber said.

The central bank's raising the cash reserved ration for banks three times in last December, as a part of its measures to contain rising inflation rate, would also impact the growth rate, the chamber added.

The apex bank itself projected a growth rate of 8.5 per cent in it s monetary policy announced on April 24.

The World Bank's had also projected a lower rate. The World Bank while projecting a rate of 8.4 per cent has blamed the government's restraining policy for the fall in growth.

According to some other analysts, the high base effect would also contribute to deceleration in growth.

On the other hand, noted economist and Professor at Jawaharlal Nehru University Arun Kumar said the government and other agencies are actually exaggerating the growth figures to keep the sentiments of the industry flying.

He said that Reserve Bank always presents a conservative figure so that its credibility is maintained. Likewise IMF and WB have their own agendas.