India's economic growth probably slowed to around 5 per cent in the three months to September, slipping from 5.7 per cent in the previous quarter, putting pressure on the Reserve Bank of India (RBI) to soften interest rates.
Two government sources also told Reuters on Tuesday that Finance Ministry Arun Jaitley would argue for RBI Governor Raghuram Rajan to lower interest rates when the two meet ahead of the monetary policy review meeting next Tuesday.
"When Rajan meets the finance minister ahead of the policy review, he would be urged to cut the interest rates," one senior finance ministry official with direct knowledge of the matter told Reuters. "A rate cut is the only hope for industry facing poor domestic and external demand."
Official GDP data for the second quarter of the current fiscal year ending March is due for release this Friday.
"Economic growth for the second quarter is expected to be around 5 per cent, mainly due to a decline in farm and industrial output growth," the source, who declined to be named, told Reuters on Tuesday.
"At the most, I can see the second quarter growth hitting 5.2 per cent," he said.
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