Finance minister Pranab Mukherjee isnt a worried man. He says recovery is well on track and a normal monsoon will help cool prices and improve growth.
The finance minister is betting on a significant recovery in the economy. So much so, he has informed the Lok Sabha that fiscal 2011-12 will be the year of a return to the 9 per cent growth story, despite the fact that food inflation continues to be worrisome.
''The favourable capital market conditions with improvement in capital flows and business sentiments are also encouraging. There is also a significant pick-up in corporate earnings and profits. The outlook is further brightened by the fact that a normal monsoon is predicted this year, Mukherjee said.
Going by these indications and considering that agriculture had a set-back in 2009-10 and is only gradually getting back to the projected path, the Indian economy is expected to grow around 8.5 per cent during 2010-11 and to breach the 9 per cent mark in 2011-12,'' he added.
On his tax reforms agenda, Mukherjee will be ready with the direct tax code (DTC) bill in the next three months. But there are still question marks on the Goods and Service Tax (GST).
''We expect to place a revised discussion paper in the public domain by next month. After a quick round of consultations with some of the major stakeholders, we should be able to submit the draft legislation to Parliament in the monsoon session,'' said Mukherjee.
''The central government is willing to provide compensation to the states for these initial years, provided there is agreement on the broad framework for a common threshold for goods and services between the centre and the states; common exemption lists between the centre and the states, mechanism to check deviations and acceptable level of overall GST rates, he added.
Meanwhile, its the finance bill that will hog the limelight on Thursday, as Mukherjee will try to get Lok Sabha's nod on the bill.
Some tax reliefs are proposed to be announced amid demands from various Opposition parties to review service tax proposal for the housing sector in the budget.
An indication about some tax reliefs was given by Mukherjee while initiating the discussion on the Bill in the Lok Sabha on Wednesday.
"I shall cover the reliefs we propose to grant...(in) our response to the issues that are raised in discussions, in my reply," the Minister said.
The Finance Bill 2010-11, which deals with direct and indirect tax proposals, is scheduled to come up for passage on Thursday.
Mukherjee said he had received various representations from industry and other stake holders for modification of tax proposals.
"While some seek modifications to the existing proposals, others have urged for fresh reliefs," he said.
Many members during the debate on the Bill had urged the government to withdraw the proposal to levy service tax on residential complexes having more than dozen units.
They argued that such a tax would increase the cost of residential properties and make them beyond the reach of common man.
The other important tax proposals which can be reviewed include increase in Minimum Alternate Tax (MAT), the portion of book profit that companies mandatorily pay as tax, from 15 per cent to 18 per cent.
The government, however, is not expected to oblige the Opposition which has been demanding roll back of levies imposed on petrol and diesel in the Budget unveiled in the House on February 26.