Economy projected to grow 8.5 per cent: Mukherjee

Exuding confidence that the economy would grow by 8.5 per cent in 2011-12, finance minister Pranab Mukherjee today said the recent hike in prices of petroleum products would not impact the fiscal deficit much.

Asked if he would consider a roll back the increase in prices of cooking gas (LPG), diesel and kerosene amidst demands from various quarters, the minister said, there was no question of revoking the price hike.

Regarding the impact of the decision to cut duties on the fiscal deficit, he said the shortfall would be made good through increase in tax collection and improved compliance.

Mukherjee told PTI in an interview that the shortfall in duty would be around Rs49,000 crore and he thought it would be possible for the government to make it up through buoyancy and by better compliance.

The government is aiming to cut fiscal deficit from 4.7 per cent of the GDP in 2010-2011 to 4.6 per cent in 2011-12.

The government proposes to reduce fiscal deficit to 4.6 per cent of the GDP in 2011-12 from 4.7 per cent a year ago.