The RBI Governor, however, also said that once the global economic crisis is over, India's economic growth will be "steeper and swifter" than the rest of the world.
"We believe that growth moderation might be steeper than we had thought earlier. I believe 2009-10 is going to be a more challenging year than 2008-09," Subbarao said at a conference organised by Confederation of Indian Industry.
While describing decline in inflation to 0.27 per cent in the second week of March as a positive feature, the Governor sought to allay the fears of India slipping into deep deflationary cycle.
"CPI (Consumer Price Index) is still elevated. There are four indices of CPI. Some of them are still in double digits. Our own view is...there is no fear of sustained deflation in India," he added.