Economic growth hit over six-year low of 5 per cent for the first quarter ended June 2019 mainly driven by demand slowdown.
He further noted that the loss of momentum in investment demand is "worrying". Besides, low business optimism, low returns on investment by the corporate and increase in inefficiency in capital employed, also raises concerns over the pace of revival in investment.
The spate of measures taken by the government including reducing the corporate tax rates is expected to revive the corporate sentiment and provide an impetus to the corporate to kick-start their capex plans.
However, amid various emerging challenges both globally and domestically, "it is highly likely that the slowdown that will last longer than expected earlier", he said.
"We expect the economy to start recovering from late FY20, as the funding constraints ease further with the RBI's recent measures to strengthen the transmission channels and the stimulus measures taken to address the current issues from both short term and long-term perspective," Singh said.
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