The Indian economy slowed sharply in the January-March quarter to 6.1%, down from 7% in the previous quarter, while the overall pace of growth in 2016-17 moderated to a three-year low of 7.1%.
Economists said the dip was due to the impact of the government's move to scrap some high value notes last November hurting sectors such as construction.
Purely based on the rate of quarterly growth, the Indian economy may have ceded its place as the fastest growing major economy in the world to China, which expanded 6.9% during the January-March period in 2017.
The overall growth in 2016-17 slowed from the previous year's upwardly revised 8% growth.
In terms of annual GDP growth, India remains the fastest growing major economy in the world. The 7.1% growth was in line with government estimates. Critics of demonetisation had said that it would hurt growth significantly while the government had defended the measure saying there could be transient impact on some sectors but in the long term it would benefit the economy.
Most experts expect the economy to post robust growth in the quarters ahead on the back of robust monsoon rains and reform measures unveiled by the government.