'Indian economy to grow at 8.5pc'

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NEW DELHI, (Internet): Despite rising global crude prices and soaring inflation, the Indian economy will expand by 8.5 per cent in the current fiscal, Finance Minister P Chidamabaram said here Monday.

"Every estimate says that the economy will still grow at 8.5 per cent," a beaming finance minister told reporters, after sharing the official data on direct tax collections.

The Indian economy had expanded by 9 per cent in the fiscal year ended March 31 and by 9.4 per cent and 9.6 per cent, respectively, in the last two fiscals.

However, the recent spurt in prices, mainly on account of rising crude oil and commodity prices and the resultant tight monetary policy of the central bank had raised apprehensions over the growth rate.

The finance minister, nevertheless, said he was optimistic about his growth estimate.

Chidamabram said that he has asked the Central Board of Direct Taxes (CBDT) to revise upward the direct tax collection estimate for the current fiscal, following an unprecedented growth last year.

The budget estimate for the current fiscal was set at Rs.3,650 billion and the finance minister said the estimates needed an upward revision, even if one assumed a 25-per cent increase this fiscal.

'For 2007-08, direct tax collection was Rs.3,144.68 billion. This represents an increase of 36.62 per cent over the previous fiscal, and 117.56 per cent of the original budget estimates,' he said.