I expect strong growth in the current financial year that stands to benefit from further improvements in business confidence. Mr Pranab Mukherjee

The Finance Minister, Mr Pranab Mukherjee, believes India's economic growth would surpass the IMF's projections in 2010 and 2011.

In its latest World Economic Outlook, the IMF had projected India's growth at 8.8 per cent in 2010 and 8.4 per cent in 2011.

I expect even better performance (than what the IMF has projected), Mr Mukherjee said in his address at the CII Annual Session here on Wednesday.

Going by industrial growth, especially in the past six months, the Finance Minister said that he expects the GDP numbers for the financial year 2009-10 to be around 7.2 per cent.

This achievement is particularly significant, considering that India had an unfavourable monsoon, which dampened the growth of the farm sector. I expect strong growth in the current financial year that stands to benefit from further improvements in business confidence, he said.

Mr Mukherjee also said that a new draft of the revised Direct Taxes Code would soon be put on the Web site of the Finance Ministry. He indicated that the Government was committed to putting in place a new Direct Taxes Code from April 1 next year.

MAT provision

He, however, did not directly respond to the outgoing CII President, Mr Venu Srinivasan's suggestion that new draft of the Code should have a minimum alternative tax (MAT) provision based on profits and not be linked to gross assets as proposed now.

Earlier, the Commerce and Industry Minister, Mr Anand Sharma, told the CII gathering that his Ministry would have consultations with Finance Ministry once the new revised draft Code is put into place.

We as a Ministry, that is Commerce and Industry, are not in favour of anything which is seen as a dampener for investors, Mr Sharma said.

India Inc is of the view that MAT on gross assets basis, as proposed in the DTC, would be detrimental to investment, especially in the manufacturing sector and said if the Government wants faster industrial growth, this proposed provision should not be pursued.

On the Goods and Services Tax (GST), the Finance Minister said the Centre was committed to compensating the States for losses, if any, incurred by them in adopting the proposed dual-GST system.

Mr Mukherjee also assured the States that he would soon release the funds they were seeking towards compensation for Central Sales Tax (CST) revenue loss on account of VAT implementation.