Bolstered by the projected 7.1 per cent economic growth for the current fiscal, finance secretary Arun Ramanathan said on Monday there are indications of softening interest rates.

"There is room for optimism. That is what numbers indicate," Ramanathan told reporters here. When asked whether interest rates would soften, he said indications are there.

Queried on whether banks would cut interest rates, he said that is for bankers to decide.

"Let us see," he said when asked whether PSU banks would further cut interest rates as they have been aggressive in doing so.

According to advance estimates of the Central Statistical Organisation, the Indian economy is likely to grow at 7.1 per cent in the current fiscal, against 9 per cent a year earlier.

Despite slowdown, the numbers are well in line with what the government, RBI and prime minister's economic panel have been projecting.

The Prime Minister's Economic Advisory Council has in fact projected the economy will grow at exactly 7.1 per cent in the current fiscal.

The economy grew by 7.8 per cent in the first half of this fiscal, down from 9.3 per cent a year ago.