"For 2014-15, real GDP growth is projected to lie between 5 and 6 per cent, with a central estimate of 5.5 per cent...for 2015-16, real GDP growth is projected to rise to 6.3 per cent," the central bank said in its Monetary Policy report released today.
It said the 5.7 per cent growth in the first quarter of the current fiscal surprised on the upside and stated that the same has slackened in the second quarter.
One of the major contributors for the decline in growth will be the monsoon deficiency, which also affects non-agricultural sectors through demand effects, RBI report said.
However, the growth will grow towards the end of the fiscal, it said, adding that an improvement in exports driven by positive sentiments in the global markets and an increase in the yield-chasing fund inflows into the country will be the primary contributors for this.
A survey of professional forecasters conducted by the Reserve Bank pegged 2014-15 growth at 5.5 per cent and expects a major improvement in the number to 6.5 per cent in fiscal.
On the risks to growth, RBI said uncertainties around global recovery, any adverse effect on the commodity prices, a below-normal monsoon in the next fiscal, a depreciation in the rupee and inabilities to augment supply capacities are the biggest detrimental factors.
It can be noted that the country has had two consecutive fiscals of sub-5 per cent growth and clocked a growth of 4.7 per cent in the last fiscal.
Even though the April-June quarter growth at 5.7 per cent was healthy, RBI Governor Raghuram Rajan said the recovery process in the country is "uneven", pointing to data releases like a fall in factory output during July.