New Delhi: Industry chamber FICCI on Monday said the Indian economy could grow at a slower pace of 6.9 percent in the current fiscal, as against 8.5 percent in the previous year.

"The fiscal year 2011-12 has the possibility of posting a GDP growth rate of 6.9 percent based in weighted average," the FICCI Economic Outlook Survey said.

As many as 33 percent of the respondents felt the economy could grow between 6.5 percent and 6.9 percent in FY2011-12.

The remaining 67 percent feel that the growth rate will touch 7 percent, the survey said.

The government expects the Indian economy to grow at around 7 percent in the current fiscal. The pace of growth is slower than the 9 per rate cent projected at the time of the Budget on account of the slowdown in the global economy.

The survey further said the inflation rate would be 7 percent by March-end, based on the weighted average.

"More than 50 percent of the respondents feel that the inflation rate would be around 7-7.5 percent in March-end, 2012. Only 24 percent of the respondents fell that inflation would still stick around 7.5 percent in the next fiscal," the survey said.

Overall inflation has remained near double digits since December, 2010. It eased to 7.5 percent in December, 2011, driven mainly by the drop in prices of food items. The Finance Ministry expects inflation to come down to 6-7 percent by March-end.

The Reserve Bank has hiked interest rates 13 times since March, 2010, to control inflation. Industry is of the view that repeated rate hikes have made borrowings costlier and has impacted investments.

Although the RBI took a pause on its rate hike strategy at its policy review last month, there is wide anticipation that it will keep policy rates unchanged tomorrow in its third quarterly review of the monetary policy, even though inflation has eased and the growth rate has slowed down.

"Notwithstanding the decline in inflation, the majority of the respondents still believe that the RBI may not go for a cut in the repo rate... A greater number of respondents believe a CRR cut may be a better option as compared to repo rate cut," the survey added.

(Agencies)