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Buoyed by higher tax collections and improvement in farm growth, the government is likely to peg economic growth at about 8.5 per cent for 2010-11, in its advance estimates to be released on Monday.
“The Ministry of Statistics and Programme Implementation is likely to project about 8.5 per cent gross domestic product (GDP) growth in the current fiscal in its advance estimates,” a Ministry official said.
Encouraged by a better than expected 8.9 per cent growth in the first half of the current fiscal, the government would also up the per-capita income of India by 6-7 per cent during the fiscal 2010-11.
Per capita income of Indians grew by 14.5 per cent to Rs 46,492 in 20090-10, from Rs 40,605 in the year-ago period.
The official said agriculture sector is expected to grow at 6-7 per cent, as against 0.4 per cent growth in 2009-10.
Though manufacturing growth has been a matter of concern during the third quarter ending December, the government could maintain its 8.5 per cent growth target in its advance estimates, the official said.
This is because of higher tax collections and improved agriculture growth due to lower base last year.
Tax collections during the current fiscal are likely to exceed the budgetary target by about Rs 37,000 crore, at Rs 7.82 lakh crore.
The government has also revised the target for direct tax collection for this fiscal to Rs 4.46 lakh crore, from Rs 4.30 lakh crore.
Also the indirect tax estimate has been hiked from Rs 3.15 lakh crore to Rs 3.36 lakh crore, indicating increased economic activity.
The advance estimates for the previous fiscal (2009-10) had pegged the growth rate for the country at 7.2 per cent. However, the country’s growth rate was finally revised upwards to 8 per cent.
The higher expansion suggests that India is recovering fast from the impact of the global financial crisis, which pulled down the GDP to 6.8 per cent during the fiscal 2008-09, from over 9 per cent recorded in the preceding three years.
The main concern of the government is to address the high inflation in the manufacturing sector which is in the range of 5-6 per cent as against a desired level of 2-2.5 per cent.
However the manufacturing growth has been in double digit in the first two quarters in this fiscal (April-June and July-September), though it came down to single digit in October and November (in the third quarter).
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