FY’13 to be turnaround year for economy: Pranab

Dismissing concerns that India’s growth rate may drop below 6.5 per cent, Finance Minister Pranab Mukherjee today 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 growth. Of course it will take some time…but from this year we expect to make a turn around,” Mukherjee said.

In the Budget 2012-13, the government had pegged 2012-13 GDP growth at 7.6 per cent (plus, minus 0.25 per cent).

Following a “disappointing” economic growth of nine-year low of 6.5 per cent in 2011-12, there have been concerns that India’s expansion rate this fiscal may slip further.

Mukherjee said that after the 2008 economic crisis, the GDP growth slipped to 6.7 per cent in 2008-09, but bounced back to 8.4 per cent in the following two financial years.

Highlighting the positives in the economy, 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.