Govt may project 8.5 pc economic growth for 2010-11

New Delhi, Feb 6 (PTI) Buoyed by higher tax collectionsand improvement in farm growth, the government is likely topeg economic growth at about 8.5 per cent for 2010-11, in itsadvance estimates to be released on Monday.

"The Ministry of Statistics and Programme Implementationis 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 growthin the first half of the current fiscal, the government wouldalso up the per-capita income of India by 6-7 per cent duringthe fiscal 2010-11.

Per capita income of Indians grew by 14.5 per cent to Rs46,492 in 2009-10, from Rs 40,605 in the year-ago period.

The official said agriculture sector is expected togrow at 6-7 per cent, as against 0.4 per cent growth in2009-10.

Though manufacturing growth has been a matter of concernduring the third quarter ending December, the government couldmaintain its 8.5 per cent growth target in its advanceestimates, the official said.

This is because of higher tax collections and improvedagriculture growth due to lower base last year.

Tax collections during the current fiscal are likely toexceed the budgetary target by about Rs 37,000 crore, at Rs7.82 lakh crore.

The government has also revised the target for direct taxcollection for this fiscal to Rs 4.46 lakh crore, fromRs 4.30 lakh crore.

Also the indirect tax estimate has been hiked from Rs 3.15lakh crore to Rs 3.36 lakh crore, indicating increasedeconomic 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 revisedupwards to 8 per cent.

The higher expansion suggests that India is recoveringfast from the impact of the global financial crisis, whichpulled 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 thehigh inflation in the manufacturing sector which is in therange of 5-6 per cent as against a desired level of 2-2.5 percent.

However the manufacturing growth has been in double digitin the first two quarters in this fiscal (April-June andJuly-September), though it came down to single digit inOctober and November (in the third quarter).