"India needs more than just lower interest rates to kickstart investment again," Bardalai said.
The Congress party-led government is promising financial reforms to reduce the fiscal deficit in the next budget due at the end of February. India also is wrestling with its expensive subsidies for commodities such as fuel that have swelled spending faster than the government can collect revenue, and economists say reforms in business regulations are needed to encourage investors.
Many businesses say they're wary of investing in India because of infrastructure bottlenecks and uncertainty about government policy. The government hasn't been able to expand electricity and transport networks enough to accommodate the previous rapid growth.
Promised government reforms to make doing business easier have stalled. India is ranked a low 132 out of 185 countries in the World Bank's survey of ease of doing business.