This estimate was scaled down to 7.0 per cent after the crisis owing to a host of factors – decline in the pace of capital formation, supply constraints, especially of infrastructure, pressure on factor productivity because of tepid progress on reforms and a high fiscal deficit. 30.
Some analysts contend that the potential growth rate may have dipped even below the Reserve Bank’s post-crisis estimate of 7 per cent. The argument is that with growth dipping below 7 per cent last year and projected to dip even lower this year, we should have seen inflation and current account deficit soften.