New Delhi, Jun 8 (IANS): Finance Minister Pranab Mukherjee Tuesday asked foreign institutional investors to remain optimistic on India growth story, saying the economy would grow around 8.5 percent in 2011-12 and the fiscal deficit will remain well under target of 4.6 percent of the GDP.

Striking an optimistic note on the trajectory that the economy is taking, the finance minister said that the revenue collection is not likely to see any decline and hence there need not be any undue fear on the issue of fiscal deficit.

Mukherjee gave the assurance during his meeting with over 30 leading Indian and foreign institutional investors here.

The finance minister urged the institutional investors to remain optimistic and take a long-term view of the economy and its performance rather than being disturbed by the short-term statistics, according to an official statement released after the meeting.

Mukherjee said the next generation financial sector reforms have already been initiated. These include, among other steps, the widening and deepening of the Indian securities markets, liberalising the policy on foreign capital flows, strengthening the regulatory and other institutional architecture and reducing transaction cost in the securities markets.

Mukherjee assured the institutional investors that the government would continue to take investor friendly policies to encourage further growth.

On inflation, the finance minister said it was likely to moderate in the coming months if the monsoon remained normal.