New Delhi, Jan 18 (IANS): India's economic growth will fall below 7.5 percent in the current financial year and it would be a "major challenge" to meet the fiscal deficit target of 4.6 percent of the Gross Domestic Prpduct (GDP), Finance Minister Pranab Mukherjee said Wednesday.

"Performance during the first half on the fiscal front poses some risks in both receipts as well as expenditure estimates. Therefore, adhering to the fiscal deficit target of 4.6 percent of GDP in 2011-12 will be a major challenge," Mukherjee said.

The finance minister said there were major concerns on the central government's financial health in the current fiscal as receipts as well as expenditure were unlikely to be as per the budgetary plan.

"We have a difficult last quarter ahead of us in this fiscal year. Our growth for 2011-12 may be around 7.5 percent or less," Mukherjee said while addressing the 84th annual general meeting of the Federation of Indian Chamber of Commerce and Industry (FICCI) here.

In Budget for 2011-12, the finance minister had set a fiscal deficit target of 4.6 percent of the GDP and economic growth target of around 9 percent.

Now, both these targets are unlikely to be met. In fact, GDP growth fell to 7.5 percent in the first half of the year. It was recorded at 6.9 percent in July-September quarter.

Mukherjee expressed hope that the things were likely to improve in the coming months as there had been a significant turnaround on industrial production easing in inflationary pressure.

"There are some clear signs of inflation moderating in the coming months and industrial production is also showing signs of pick-up while services and agriculture retained their growth momentum," he said.

After remaining near double-digit for almost two years, inflation fell to 7.47 percent in December.

Mukherjee said inflation will fall in the range of 6-7 percent by the end of March.