As forecast for this fiscal, India is likely to grow also by 7.1 per cent in the next fiscal and the economy is likely to see a lower interest rate regime, a top economist said on Friday.

"(The) Indian economy is likely to grow by around 7.1 per cent. . . in 2009-10," Prime Minister's Economic Advisory Council chairman Suresh Tendulkar told a seminar in Mumbai.

The growth may be weak in the first half but it is likely to pick up in the second half of the next fiscal, Tendulkar said.

"Moving ahead, the system is likely to see a lower interest rate regime," he said.

'Crisis of confidence' in advanced economy has been quite serious, Tendulkar said, adding the asset quality in the Indian banking system may deteriorate owing to the global slowdown.

However, well regulated Indian banking system is in a better shape as compared with that of other economies, he said.

"The asset quality may deteriorate because of the current slowdown...but the Indian banking system is in a much better shape (to face the situation)," he added.