India now a gasping elephant!

Putting the onus for the dismal show of the economy on administrative obstacles and policy paralysis, HSBC said while the former have held back key investment projects, the latter has significantly hurt investor sentiments.

"With policy paralysis not likely to ease any time soon, however, India may have to settle for sub-par growth and elevated inflation over the next couple of years," HSBC said in a report.

India's economic growth rate slowed to a nine-year low, in March quarter at 5.3 per cent and 6.5 per cent for 2011-12. The decline in growth was witnessed in almost all segments of the economy, including agriculture, manufacturing, mining and construction.

At 6.5 per cent, the GDP growth in 2011-12 has been at a lower level than during the crisis period growth of 6.7 per cent, it said.

In a veiled attack, Credit Suisse also criticised the policy paralysis, saying, "It (the fall in GDP growth) will inevitably send shivers down the spines of senior coalition politicians, who will no doubt be heaping pressure on the Reserve Bank to react and react aggressively".