'The real estate sector has been badly bruised because it has become too reliant on funding from NBFCs, including housing finance companies. 'When the NBFC industry was rocked late last year by a large default, the real estate sector was hit hard. 'An intricate web of links between rural incomes, construction activity and shadow banks are fuelling the economic slowdown', says Pranjul Bhandari.

But lower growth numbers in the quarters to come may not mean renewed weakness in the economy at the ground level, says Pranjul Bhandari.