Prime Minister Manmohan Singh has said that India's economic growth in 2008-09 is estimated to have fallen below 7 per cent and is likely to remain at that level in the current fiscal on the back of fiscal and monetary initiatives.

"Our growth rate, which was close to 9 per cent in the previous five years, will fall below 7 per cent in 2008-09 we hope to be able to achieve a similar growth rate in 2009-10, with continuous reliance on monetary and fiscal policy," he said in his remarks at the dinner hosted for leaders of the G-20 summit in London.

Noting that stimulus measures have increased public debt beyond the estimated levels in 2008-09, Singh said, "It is our firm intention to return to a fiscally sustainable path after 2010."

The Central Statistical Organisation (CSO) in its advance estimates of national income in February has projected 7.1 per cent Gross Domestic Product (GDP) growth rate for 2008-09.

Although Singh has expressed the optimism that economic growth rate in the current fiscal would be retained at the 2008-09 level, many leading multilateral agencies including the World Bank, the Asian Development Bank [Get Quote] (ADB) and the Organisation for Economic Cooperation and Development (OECD) have forecast moderation in growth.

The World Bank in its recent forecast projected 4 per cent economic growth for India in 2009-10, while ADB projected 5 per cent expansion during the fiscal. According to the OECD, the growth could be 4.3 per cent.

All the three agencies, however, projected recovery during 2010-11 pointing out that growth rates could range from 5.8 to 7 per cent.

Noting that additional fiscal stimulus undertaken by the government will raise the debt to GDP ratio by few percentage points over the initial estimates, Singh said, "This is relatively modest compared to what would have happened had our banks suffered a financial crisis."

Referring to pressures on balance of payments position in view of weak exports and drying up of capital flows, he said, "India's current account deficit in 2009-10 is likely to be about 1.4 per cent of GDP."

 India, the prime minister added, would be able to finance the current account deficit without difficulty. "In any case, our strong foreign reserves position enables us to cope with any shortfall in capital flows we may experience," he said.

According to a recent Reserve Bank report, India recorded the highest current account deficit of 14.6 billion dollars since 1990 in the third quarter for 2008-09.