Last week, Reserve Bank of India (RBI) Governor Raghuram Rajan had not ruled out cutting interest rates in India for a fourth time, admitting that the world's central problem is continued slowing economic growth. India's Gross Domestic Product (GDP) slowed to 7 per cent in the three months through June from 7.5 percent in the previous quarter, government data showed on Monday. Analysts had forecast annual growth of 7.4 percent in the quarter. Last week, Reserve Bank of India (RBI) Governor Raghuram Rajan had not ruled out cutting interest rates in India for a fourth time, admitting that the world's central problem is continued slowing economic growth. After cutting its repo rate by 75 basis points this year, the RBI had kept the rate on hold at its last policy review, saying it wanted to monitor inflation and wait for lenders to further lower their lending rates. Infrastructure sector growth slowed to 3-month low of 1.1 per cent in July as output of crude oil, natural gas and steel contracted, making a case for a further rate cut by the Reserve Bank. The expansion in eight core sectors, which contribute about 38 per cent to the overall industrial production, was 4.1 per cent in July last year. According to the data released by the Commerce and Industry Ministry on Monday, output of crude oil, natural gas and steel contracted by 0.4 per cent, 4.4 per cent and 2.6 per cent respectively in July this year. Growth in output of coal, cement and electricity slowed to 0.3 per cent, 1.3 per cent and 3.5 per cent respectively last month. However, refinery products and fertiliser production grew by 2.9 per cent and 8.6 per cent respectively. In March and April this year, the eight sectors had contracted by 0.1 per cent and 0.4 per cent respectively. However, in May and June the infrastructure sector had expanded by 4.4 per cent and 3 per cent. The slowdown in the core sector is expected to raise the clamour for further rate cut by RBI, which has already lowered the key lending rate thrice this year. The next monetary policy review is on September 29. During the April-July period of the current fiscal, the core sector output has expanded by 2.1 per cent as against 5.5 per cent in the first four months of 2014-15. The overall growth of eight core industries in the entire 2014-15 fiscal stood at 3.5 per cent against 4.2 per cent in the previous fiscal.

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