Expectations for India’s economic growth are being revised sharply lower as a surge in people losing their jobs and defaulting on debt suggest a more halting recovery from the financial shock of the COVID-19 pandemic.

Economists are downgrading their estimates as a range of data – from the rate of cheques bouncing to the amount of mortgaged gold jewellery up for sale - shows the extent of the economic damage from a devastating second wave of the disease.

Some observers also fear the psychological blow from the virus disaster that ripped through India this year killing tens of thousands of people will leave consumer reluctant to spend.

India’s government is sticking with a forecast that the economy will grow 10.5% in the fiscal year that started on April 1, but on Tuesday State Bank of India - the country's largest lender - slashed its growth forecast to 7.9% from 10.4%.

Several international banks such as Barclays and UBS have also cut back their predictions.