Amid grim global situation and high domestic interest rates, prime minister Manmohan Singh said on Friday that the country's economic growth is likely to slow down to 7-7.5 per cent this fiscal from 8.4 per cent last year.

"...growth in the current fiscal year is likely to be lower, between 7 and 7.5 per cent, in a large measure due to the continuing uncertainty in the global economic environment," he said at the chief secretaries conference here.

India's economy had expanded by 8.4 per cent in 2010-11 financial year.

"This (8.4 per cent growth) was a creditable performance when seen in the background of a crisis-ridden world economy. But, monetary tightening together with a difficult global economic environment, particularly the lingering Euro Zone crisis, has impacted the rate of growth adversely," Singh added.

While price situation is showing signs of moderation, the Prime Minister said the key to controlling inflation in food articles on a sustainable basis is by increasing agricultural production and productivity.

"And it is here that the state governments have a crucial role to play," he said.

He asked states to give more attention to modern technology in agricultural research besides public investment in the sector and reforms in the farm marketing system and practices.

"There is a need to review and amend the Agriculture Produce Marketing Act to enable farmers to bring their products to retail outlets and also allow retailers to directly purchase from the farmers. This would bring better remuneration to farmers, check wastage and allow competitive prices to prevail in retail markets," Singh added.