The Indian Prime Minister's economic advisory panel has lowered India's GDP growth estimate for 2008-09 to 6.5-7 percent from 7.1 percent as contraction of trade turned out to be much greater than it was anticipated. In January, the panel had revised down its growth projection to 7.1 per cent for 2008-09 from 7.7 per cent projected initially because of painful adjustments to the abrupt changes in the international economy.

There was deeper than expected recession in advanced countries. The psychology of gloom and doom which has essentially pervaded in the industrialized countries was imported to this country, PM's economy advisory council chairman Suresh Tendulkar said to agencies on Sunday.

Tendulkar said the global crisis affected the Indian economy through export-related industries and capital outflows. Foreign institutional investors' obligation back home impacted domestic industries capital requirement, he said.

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