New Delhi, Dec 27 (IANS): The Indian economy would soon be on a higher growth trajectory with inflation moderating and the savings rate going up, Finance Minister Pranab Mukherjee has said.

Addressing the fourth meeting of the Parliamentary Consultative Committee attached to his ministry Monday, Mukherjee said the "downturn is only temporary".

He said due to eurozone crisis, fall in external demand resulting in a slowdown in exports, currency volatility and current account deficit among others had affected the economy, according to an official statement released here Tuesday.

India's economic growth declined to 7.3 percent in the first half of the current fiscal as compared to 8.6 percent growth during the same period of last year.

Mukherjee early this month revised downward the growth projection for the current fiscal to 7.5 percent from his budgetary target of around 9 percent.

Food inflation, meanwhile, has come down to 1.8 percent and there is moderation in inflation in general. The savings rate has also gone up. These are encouraging signs that would give relief to policy makers, according to Mukherjee.

Mukherjee said he had issued instructions to all ministries and departments to adhere to their expenditure ceilings that would help in containing the fiscal deficit.

For the current fiscal, the government has proposed to keep the fiscal deficit at 4.6 per cent of the gross domestic product (GDP)in the current fiscal year that ends in March 2012, down from 4.7 per cent in 2010-11.

But this is unlikely to be met due to increasing government spending. With not much hope on robust tax collections and disinvestment, economists see the gap between the government's expenditure and receipts to be between six and seven per cent for this financial year. In the first half of 2011-12 itself, the deficit had touched 6.7 per cent of the gdp.