New Delhi, Dec. 2: Finance minister P. Chidambaram, buoyed by the fall in the current account deficit, is hopeful of the economy expanding 5 per cent this fiscal.
“We are going through a period of stress but there is ground for optimism. We hope things will become better in the second half of the current fiscal,” he told reporters.
Better-than-expected second-quarter GDP growth of 4.8 per cent, improvement in the current account deficit and recovery of exports prompted Chidambaram to project an optimistic view.
“The second-quarter GDP growth rate indicates that the economy may be recovering and on a growth trajectory again...performance of the second quarter is broadly on the expected line,” he said.
The finance minister expects to ramp up tax collections and bridge the fiscal deficit.
“There is some momentum in the beginning of the second half. We will push for tax collections to speed up and once revenue collections speed up, we are confident that we will contain the fiscal deficit.”
According to Chidambaram, the government will garner a little more from the sale of spectrum than the budgeted target of Rs 40,000 crore.
However, the output of core industries fell 0.6 per cent in October because of a poor show in cement, coal, electricity and natural gas. The contraction follows a robust 8 per cent growth in September.
During the first seven months of the current fiscal year, core sector output grew a mere 2.6 per cent compared with 6.8 per cent in the same period of the last fiscal.
Natural gas output contracted 13.6 per cent, while coal production declined 3.9 per cent. Cement and power generation posted marginal growth of over 1 per cent each.
Fertiliser output grew 4.1 per cent, while steel production was up 3.5 per cent.