• Brownish spots develop near the soil line or cotyledons
• Water-soaked lesions on leaves & stems darken and collapse
• Water-soaked spots that rapidly expand into large yellowish-green or grayish-brown, irregular lesions that are soft and spongy in texture
• Velvet-like fungus mycelium and spores are produced on the lesion surface under cool, humid conditions

• Botrytis cinerea - abundant hyaline conidia (asexual spores) borne on grey, branching tree-like conidiophores
• It overwinters as sclerotia or intact mycelia, both of which germinate in spring to produce conidiophores
• The conidia are dispersed by wind and rain-water and cause new infections

Favourable conditions and spread:

• Fungus sporulation and infection, is favored by cool and wet weather
• Temperatures of 17–23°C, RH - 90%
• Excessive application of nitrogen makes plants such as young transplants more susceptible to gray mold
• High canopy density creates conditions for extended leaf wetness at night and subsequent increased gray mold severity

Management :

• Field sanitation - remove and burn decaying infected plant parts
• Space seedlings and transplants to allow for free flow of air through the crop
• Treatment with hot air at 38°C for 48-72 h or hot water at 50°C to 53°C for 2 to 3 min

Source of Images: http://www.worldofchillies.com/growing_chillies/chilli_pests_problems_diseases/chilli_diseases/chillidiseases.html