"It will be difficult to achieve the target of fiscal deficit of 4.6 percent for the current financial year though we will make our best efforts to reach as near as possible," Mukherjee said.
FM added that inflation will drop to between 6 percent and 7 percent by the end of March.
India's headline inflation was a 7.47 percent in December, a two-year low as food price pressure eased dramatically.
The current time is most challenging for all policymakers "...we have difficult 2 -3 months in the current fiscal. Our growth for 2011-12 may be around 7 percent plus or even less than that. There are also concerns about central government finances for the current fiscal", he said.
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 percent from 8.6 percent 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.
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