The Reserve Bank on Friday slashed economic growth projection to 7.2 percent for the current fiscal from 7.8 percent estimated earlier amid volatile crude oil prices and supply chain disruptions due to the ongoing Russia-Ukraine war.

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Unveiling the first bi-monthly monetary policy review of the current fiscal, RBI Governor Shaktikanta Das said external developments during the past two months have led to the materialisation of downside risks to domestic growth and upside risks to inflation.

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"...Real GDP growth for 2022-23 is now projected at 7.2 percent with Q1:2022-23 at 16.2 percent; Q2 at 6.2 percent; Q3 at 4.1 percent; and Q4 at 4 percent, assuming crude oil (Indian basket) at USD 100 per barrel during 2022-23," Das said, adding that the Indian economy is steadily reviving from its pandemic-induced contraction.

Earlier this year, the Economic Survey in January had projected a growth rate of 8-8.5 percent for the current fiscal.

The RBI Governor said that with the easing of restrictions, domestic air passenger traffic rebounded in March.

"According to our surveys, consumer confidence is improving and households' optimism in outlook for the year ahead has strengthened with an uptick in sentiments."

He said the business confidence is in the optimistic territory and supportive of revival in economic activity.

Going forward, robust rabi (winter crop) output should support recovery in rural demand, while a pick-up in contact-intensive services should help in further strengthening urban demand, he added.

The RBI on Friday kept the benchmark interest rate unchanged at 4 percent.