The International Monetary Fund (IMF) has cited corporate and environmental regulatory uncertainty and "lingering weakness" in some non-bank financial companies as reasons for India’s "much weaker" than expected economic growth, reported news agency ANI.

"Again, we will have a fresh set of numbers coming up, but the recent economic growth in India is much weaker than expected, due to corporate and environmental regulatory uncertainty and lingering weakness in some NBFCs,” IMF spokesman Gerry Rice said, warning that risks to its India outlook is tilted to the downside.

It cut India’s FY20 GDP growth projection by 0.3 percentage points to 7 percent owing to "weaker-than-expected outlook" for domestic demand. It also lowered its FY21 growth estimates to 7.2 percent from 7.5 percent earlier.

On September 12, government data showed that industrial output grew 4.3 percent month-on-month (MoM) in July due to a sharp dip in manufacturing and agriculture output. Industrial output, or factory output, is the closest approximation for measuring economic activity in the country's business landscape.

GDP grew 5 percent in April-June buffeted by weak household spending and muted corporate investment as against 8 percent growth in the same period last fiscal.