Summary Box: India cuts growth forecast to 7 pct

The Associated Press
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An Indian fruit vendor waits for customers in front of a mobile phone shop in New Delhi, India, Tuesday, Jan. 24, 2012. India's central bank said growth will slow to 7 percent this fiscal year, but left interest rates unchanged Tuesday as it struggles to balance a toxic mix of high inflation and a flagging economy. (AP Photo/Kevin Frayer)

SLOWER GROWTH: India's central bank cut its estimate of the nation's economic growth to 7 percent this fiscal year from its October forecast of 7.6 percent. It said it would keep interest rates unchanged until it sees a sustained drop in inflation which has been above 9 percent for most of the last two years.

THE BACKGROUND: The bank has been under pressure to cut interest rates to stimulate economic growth which has dropped below 7 percent for the first time in two years.

MULTIPLE PROBLEMS: Reserve Bank Governor D. Subbarao urged the government to rein in spending, saying "the fiscal deficit has to come down." Business leaders say government borrowing is crowding out private companies from credit markets.