Experts suggest that while a rate cut in December seems unlikely, a reduction in the Cash Reserve Ratio (CRR) could be on the cards to support liquidity in the system.

The pace of slowdown worsened in Q2FY25 with sluggish sales and hike in input costs. Slower growth in sales reflects weakness in urban consumption which is likely to persist urban wage growth, too, decelerated. Urban wage growth is a function of moderation in corporate profitability which has taken a hit.

India's GDP growth slowed to 5.4% in Q2 FY25, marking an eight-quarter low and raising concerns about the economic outlook. Economists are revising growth forecasts downward, with Goldman Sachs projecting 6.

India's economy grew at its slowest pace in seven quarters, expanding just 5.4% year-on-year in the July-September quarter. Weaker manufacturing and private consumption drove the slowdown. The Reserve Bank of India faces calls to cut rates to stimulate demand,

The economy expanded 5.4% in the second quarter from a year ago, hobbled by tepid consumption demand and a weakening in the mining sector