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Dismissing concerns that India's economic growth will falter further in the current fiscal due to policy paralysis, the Finance Minister, Mr Pranab Mukherjee, said all steps are being taken to get the economy back to the pre-2008 growth trajectory.
He also saw the current fiscal (2012-13) as a year of ‘turnaround' for the economy, indicating that GDP growth could comfortably exceed 7 per cent. The optimism stems from the recent decline in global oil prices, interest rate cycle reversal by the central bank, and expectation of a normal South-West monsoon.
“I do not accept the prophecies of self-styled Cassandras. We are taking all steps to come back to the targeted GDP growth. We expect to make a turnaround this year,” Mr Mukherjee said at the 28th annual conference of Chief Commissioners and Directors-General of Income Tax in the Capital on Monday.
Terming the GDP growth of 6.5 per cent in 2011-12 as “disappointing”, Mr Mukherjee pointed out that the renewed global uncertainty had affected domestic business sentiments last fiscal. The tight monetary policy also did not help. .
“The Indian economy has faced many ups and downs. It would be better to compare it with contemporary performance rather than historic performance,” he said, adding it is possible to come back quickly to the pre-crisis growth trajectory”.
After recording 6.7 per cent GDP growth in 2008-09, the economy rebounded to grow at 8.4 per cent in 2009-10 as well as in 2010-11 before slowing down to 6.5 per cent in 2011-12.
On the direct tax collections for 2012-13, Mr Mukherjee said that the target of Rs 5.70 lakh crore was “modest” and can be achieved. The target reflects a 15 per cent increase over the actual collections of Rs 4.95 lakh crore in 2011-12.
The economy grew 5.3 per cent in the fourth quarter of the last fiscal, the weakest pace of expansion in nearly a decade. The growth performance was hurt by slow economic reforms and weak investment sentiment. Prior to the global crisis in 2008-09, the Indian economy was growing at an average of 9 per cent.
Vodafone tax issue: The Finance Ministry has not made any move as yet on the Vodafone tax matter post the enactment of Finance Bill, a top official said. “Nothing as yet,” Mr R.S. Gujral, Finance Secretary, said at the conference when asked if the tax department has sent a reminder or a letter to Vodafone post the retrospective changes to income-tax law.
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