Indian economy set to meet fiscal targets, 8.5 per cent growth: Mukherjee

The Indian economy will expand at 8.5 per cent during the current financial year even as the government was hopeful of containing fiscal deficit at the targeted 4.6 per cent of GDP announced in the union budget for 2011-12, finance minister Pranab Mukherjee said today.

Addressing a group of over 30 leading financial institutions, both domestic and foreign, he said the provisional figures for 2010-11 have indicated that the economy is on the expected path.

He said revenue collection is not likely to see any decline this year and hence there was no need for any undue fear on the issue of fiscal deficit. India's economic growth this year could be around 8.5 per cent, he added.

On the issue of fuel subsidy, Mukherjee said it was difficult to accurately estimate the burden on the government, especially in view of the volatility in the international crude prices. However, if there is any requirement of additional subsidy, funds would be committed with least impact on the fiscal deficit, the minister added.

The finance minister said it was too early to reach judgment on the government achieving its disinvestment target as only two months have gone by in the current financial year. The government, he added, will pursue the issue of disinvestment.

The finance minister said the public issue of Power Finance Corporation (PFC) was already completed in May 2011 and the government has raised Rs1,145 crore on this. He reminded the investors that the disinvestment programme in FY11 was not pursued with extra vigour as the 3G/BWA spectrum auctions had brought in higher revenue than expected.