Indian economy is expected to grow by about 7.5 per cent in the current fiscal, as the fourth quarter should see very good pick up and better the performance of 6.9 per cent seen in second quarter, the Chief Economic Adivsor to the Finance Ministry, Dr Kaushik Basu, said here today.

The third quarter will be a dificcult quarter, Dr Basu told reporters outside North Block reacting to the Q2 GDP numbers released today. He also did not rule out the possibility of a small slippage in fiscal deficit. The Centre has pegged the fiscal deficit target for 2011-12 at 4.6 per cent of GDP. Dr Basu also said that the Centre would not recklessly cut its expenditure to meet fiscal deficit targets.

"A big balancing act is ahead of us. We are keen on fiscal consolidation and bring fiscal deficit as close as possible to 4.6 per cent," he said.

Asserting that India remains growth leader, Dr Basu said that a slight slippage in investments does not jeopardise the long term growth story of the country.

On whether slowing economic growth would make a case for monetary easing by the central bank, Dr Basu declined to comment on the monetary aspects and said one would have to wait for RBI announcement on December 16.

India's economic growth slowed down to its weakest pace in 2 years to record growth rate of 6.9 per cent in Q2. The Q2 growth performance was weighed down by poor manufacturing performance and decline in mining output.

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