The World Bank (WB) said it expected the Indian economy to grow by just 6.8 percent in the current financial year, significantly lower than the 7.25-7.75 percent pegged by the finance ministry, as the economy faced high interest rates and there was "heightened uncertainty of policy reforms".

The WB also cut its forecast for global economic growth rate to 2.5 percent for calendar year 2012 from its earlier estimate of 3.7 percent. It also cautioned against the persisting threat of a global financial shock, "similar in magnitude to the Lehman crisis".

It asked developing countries to be ready for the "real" risk arising out of an escalation in the euro zone debt crisis. Developing countries will grow 5.4 percent in 2012, down from a forecast of 6.2 percent in June, the bank said.