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MUMBAI, April 13 (Reuters) - India's economic growth slowed to slightly less than 7 percent in the 2008/09 fiscal year that ended in March due to the impact of the global downturn, Prime Minister Manmohan Singh said on Monday.
"We have recorded a growth of 9 percent in the first four years of our government. Last year, because of the impact of global recession, the growth rate will be slightly less than 7 percent," Singh told a televised news conference.
High borrowing costs and followed by the global crisis slowed Asia's third largest economy last year, and analysts forecast less than 6 percent expansion in the current year to March 2010. A contraction in demand at home and abroad has cut India's factory output and exports sharply since October.
India's industrial output contracted 1.2 percent in February from a year earlier and exports were down more than a fifth. See [ID:nDEL72002] and [ID:nBOM460622]
"The global economy is in deep trouble and we are affected by it. But because of the measures we have taken, we had anticipated something of this sort, the effect on our economy is not as great as the impact on many other countries," Singh said.
On Monday, the trade secretary said provisional data shows exports down by about 31 percent in March from a year earlier, and it was likely to remain subdued in the next six months as global trade flows are seen contracting in 2009.
India's central bank has cut interest rates by 400 basis points since October, while the government has slashed duties and increased public spending to stimulate a slowing economy.
Policy makers are now debating on the need for more rate cuts and fiscal stimulus to revive growth. Some analysts expect the central bank to cut rates further when it reviews its policy on April 21.
A decision on further fiscal stimulus could be expected only after the April/May elections are over and a new government assumes office.
Last month, the care-taker government said it will sell 2.41 trillion rupees ($48.2 billion) of bonds in the first half of 2009/10, two-thirds of its full-year target, anticipating higher spending needs in the coming months to revive growth. See [ID:nDEL493678]
In February, India revised upwards its fiscal deficit target to 6 percent of gross domestic product for 2008/09, from 2.5 percent earlier, as market borrowings surged in March quarter. It is estimated at 5.5 percent of GDP for 2009/10 fiscal year.
($1=50 rupees) (Reporting by Surojit Gupta and Rajkumar Ray; Editing by Kazunori Takada)