New Delhi: Dismissing concerns that India’s growth rate may drop below 6.5 percent, Finance Minister Pranab Mukherjee on Monday said 2012-13 would be the turnaround year for the economy.
Addressing a conference of top officials of the Income Tax Department, he said steps are being taken to put India back on path of high economic growth.
“We are taking all necessary steps to ensure that we come back to the path of the targeted GDP (Gross Domestic Product) growth. Of course it will take some time... but from this year we expect to make a turn around,” Mr. Mukherjee said.
In the Budget 2012-13, the government had pegged 2012-13 GDP growth at 7.6 percent (plus, minus 0.25 percent).
Following a “disappointing” economic growth of nine-year low of 6.5 percent in 2011-12, there have been concerns that India’s expansion rate this fiscal may slip further.
Mr. Mukherjee said that after the 2008 economic crisis, the GDP growth slipped to 6.7 percent in 2008-09, but bounced back to 8.4 percent in the following two financial years.
Highlighting the positives in the economy, Mr. Mukherjee said interest rate cycle has been reversed and there is growth in mining sector, turnaround in investment growth rate and there are predictions of normal monsoon, besides decline in crude oil prices.
“All these factors should help in recovery of domestic growth momentum,” he added.
On direct tax collection target of Rs 5.70 lakh crore for the current fiscal, he said it was achievable.
“I do feel this target is moderate and can be achieved,” he said while asking the tax officials to work “relentlessly” to improve tax collection.
In 2011-12, the direct collection at 4.95 lakh crore was marginally down from the revised target of 5.05 lakh crore.
Mr. Mukherjee said that while renewed growth momentum will help improve direct collection, there are several challenges before the I-T Department.
He expressed concern over decline in tax-GDP ratio and asked the officials to reverse the trend. The tax-GDP ratio has dropped to 10.5 percent in 2011-12, from 12 percent in 2007-08.
