"...we have difficult 2 -3 months in the current fiscal. Our growth for 2011-12 may be around 7 per cent plus or even less than that. There are also concerns about central government finances for the current fiscal", he said while speaking at the CNBC TV18 Business Leadership award function.
He, however, expressed hope that the Reserve Bank would take appropriate steps in its forthcoming monetary policy review on January 24 to keep the growth momentum.
"Going forward, I am sure RBI will take into account important concerns of balancing the targets of controlling inflation and keeping up growth and employment generation," he said.
The economic growth during the first half of the current fiscal has slipped to 7.3 per cent from 8.6 per cent in the corresponding period a year ago.
On fiscal deficit, he said the performance during the first half of 2011-12 poses some risks on both receipts as well as expenditure. "Adhering to the fiscal deficit target of 4.6 per cent of GDP in 2011-12 is a major challenge," he said.
The government proposes to bring down the fiscal deficit in the current fiscal to 4.6 per cent of the GDP from 4.7 per cent a year ago. However, the surge in subsidy bill and poor realisation from disinvestment has made the task difficult.
According to official estimates, the subsidy bill of the government is likely to exceed by about Rs 1 lakh crore during 2011-12. As far as disinvestment is concerned, the government has been able to mop up around Rs 1,100 crore only against the target of Rs 40,000 crore.
Referring to the price situation, Mukherjee said inflation, which has come down to 7.47 per cent in December from 9.11 per cent a month ago, would further moderate in the coming months.
"There are some clear signals of inflation moderating in the coming months. I am expecting it (inflation) to be in the range of 6-7 per cent by end March," he said.
The improvement in index of industrial production (IIP) numbers and inflation situation, he added, "indicates some improvement in the overall economic parameters in second half for 2011-12.
"I hope to see this trend get consolidated in the coming months with some policy correction. India`s growth fundamentals are strong and they look more attractive in a world challenged by problems of confidence and lack of growth," he added.
Attributing the rupee depreciation to global factors, he said, the pressure on the domestic currency was likely to continue until some solution is found to the sovereign debt problem of the eurozone countries.
"There has been a moderation in the level of foreign institutional flow and this has resulted in declining equity indices and a sharper depreciation of rupee in forex market", the Minister said.
Rupee depreciation, he added, was also being driven by global factors and "the pressure would continue until there is a solution to sovereign debt problem in eurozone."
The Indian currency has depreciated by over 16 per cent against US dollar in the current financial year.