India’s economic growth has slumped to 4.9 per cent in the year to March 2016 from 6.5 per cent the previous year.
The slowdown has triggered concern about the country’s fiscal outlook.
The economic slowdown has also brought down the country to the third position behind Japan and the US in the World Bank’s annual rankings of developing countries.
India has ranked only fifth on the list of the top 10 most-favoured countries.
However, the Reserve Bank of India (RBI) has put the stock market on a steady rise in 2016-17 and it expects the economy to grow 7.2 per cent this year and 8.5% next year.
The stock market has climbed more than 8,000 per cent from November, when it was hovering around 3,000.
The latest uptrend has pushed the rupee to record highs against the US dollar.
The benchmark Sensex has soared more than 12 per cent since November and is now trading at Rs 2,07,078.
It is also the biggest gain in five years.
India has had a strong run of growth, which has helped to keep inflation in check, which is the key determinant of the countrys economic growth.