The government came out with the second part or mid-year survey for the first time, highlighting new factors affecting the economy since the last such exercise earlier this year.
Broadly, the real neutral interest rates hover around 1.25-1.75 per cent, it said, adding that it "implies neutral nominal rates -- assuming a target inflation of 4 per cent -- of 5.25-5.75 per cent".
"Today's rate is 6 per cent or about 25-75 basis points above neutral rates," it added.
Noting that during 2016-17, gross bank credit outstanding grew at around 7 per cent on an average, the Survey said: "The sluggish growth can be attributed to several factors, including incomplete transmission of the monetary policy as banks had not passed on the entire benefit of monetary easing to borrowers."
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The Reserve Bank of India cut the policy rate by 50 basis points during 2016-17.
However, it shifted its monetary policy stance from accommodative to neutral in February, and cut the repo rate by 25 basis points this month.
The Survey also said sluggish growth and increasing indebtedness in some sectors of the economy have impacted the asset quality of banks, which is a cause for concern.
Under the amended Act, inflation target will be set by the government, in consultation with the Reserve Bank, once in every five years, which provides for a statutory basis to an empowered Monetary Policy Committee (MPC).
The government has fixed the inflation target of 4 per cent with tolerance level of +/- 2 per cent for the period beginning from August 5, 2016 to March 31, 2021.