Moody's Investors Service on Friday slashed its estimate of India's GDP growth during 2020 calendar year to 2.5 per cent from an earlier estimate of 5.3 per cent, on account of the rising economic cost of the coronavirus pandemic.

This compares to 5 per cent growth in 2019.

Moody's said, at the 2020 estimated growth rate, a sharp fall in incomes in India is likely, further weighing on domestic demand and the pace of recovery in 2021.

'In India, credit flow to the economy already remains severely hampered because of severe liquidity constraints in the bank and non-bank financial sectors,' it said.