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India's economy will grow at 6.5% to 7% in the current financial year ending March 2025, a finance ministry report said on Monday, projecting growth at below 7.2% forecast by the country's central bank.

The growth projection in the annual Economic Survey, tabled in parliament by Finance Minister Nirmala Sitharaman ahead of the federal budget on Tuesday, is also lower compared to 8.2% growth in the previous year, and the upwardly revised estimates of 6.8% to 7.2% by private economists and rating agencies.

The report on the state of economy, authored by Chief Economic Adviser V. Anantha Nageswaran and his team in the finance ministry, said that with risks evenly balanced, there could be slower growth in private investments.

"Private capital formation after good growth in the last three years may turn slightly more cautious because of fears of cheaper imports from countries that have excess capacity," it said.

Prime Minister Narendra Modi, whose party fell short of reaching the half-way mark in the general elections, is widely expected to use strong tax collections and a record $25 billion dividend from the central bank to ramp up budget spending to address concerns over uneven economic growth.