Finance Minister Pranab Mukherjee on Thursday said that financial year 2009-10 was ending with clear signs of economic rebound and the growth would rise to about 8.5 per cent in the next fiscal.
"It (fiscal 2009-10) began amidst the gloom of an economic downturn, but the year is ending with clear indicators of vibrant economic rebound," he told reporters after tabling the Economic Survey and report of the 13th Finance Commission in Parliament.
"Capturing this mood (of economic rebound), the Survey forecasts a GDP growth of 8.5 per cent +/- 0.25 per cent during 2010-11", the Minister said.
Following the impact of the global financial crisis, the economic growth rate slipped to 6.7 per cent during 2008-09 from over 9 per cent during the preceding three years. Referring to the report of the Finance Commission, Mukherjee said, "We have accepted all the major recommendations of the Commission."
The Commission in its report on devolution of taxes, recommended that share of states in union taxes be raised to 32 per cent from 30.5 per cent now. "The states will get 1.5 per cent (of the net proceeds of union taxes) more," Mukherjee said.
Recalling 5.8 per cent growth rate in the last quarter of the 2008-09, Mukherjee said, "We began the fiscal 2009-10... (with) a sense of despondency and gloom. The economy was going through a downturn."
The economy situation has improved over the year, he said, adding, "We have come out and the Economic Survey has projected (that) for the year 2010-11 growth rate would be 8.5 per cent plus/minus 0.25 per cent. "That means we began with a sense of uncertainty, and we are ending with sense of confidence", he said.
The Central Statistical Organisation (CSO) in its advance estimates of national income projected 7.2 per cent growth rate for the current fiscal, up from 6.7 per cent a year ago. The economy in the second quarter of the current fiscal ending September 2009 recorded a growth rate of 7.9 per cent, much more than anticipated by any analyst or think tank.
Mukherjee further said that Survey, besides providing an economic analysis, has thrown up several new ideas and hoped that they would generate debate and discussion for future policy formulation.
"I want my ministry to be engaged in not just designing fiscal policy and recording economic performance but to be a laboratory of new ideas. It is in this spirit that the Economic Survey this year also provides new ideas and foundations for policy initiatives over the medium-term", he added.
