Rajni Thakur, economist at RBL Bank, in an interview with CNBC-TV18 on Friday, said that there is a huge amount of risk aversion in the business environment.

“Overall there is a huge amount of risk aversion in the business environment; be it demand side, be it supply side. Nobody has clarity on how the next 6 months are going to pan out," said Thakur, reacting to the WPI numbers that were released on Friday.

India's wholesale inflation, as measured by the Wholesale Price Index (WPI), slipped to 2.45 percent in May, as against 3.07 percent in April, the lowest level since July 2017.

“The consumers are withdrawing from their consumption expenditure, the investors are withdrawing from their investment plan and hence the credit offtake; the kind of demand we would want to go on to the capex lending is not happening and that is something that goes beyond rate cut kneejerk reaction...," added Thakur.