New Delhi: While exuding confidence over the state of the economy, Finance Minister Pranab Mukherjee on Thursday said the government will adopt major recommendations of the 13th Finance Commission.
"It (fiscal 2009-10) began amidst the gloom of an economic downturn, but the year is ending with clear indicators of vibrant economic rebound," Mukherjee told reporters here after the tabling of the Economic Survey and the 13th Finance Commission report in Parliament.
The Survey, an official document on the health of the country’s economy, projected the GDP to grow by 7.2 percent in the current fiscal and 8.25-8.75 percent in 2010-11.
"Capturing this mood (of economic rebound), the Survey forecasts a GDP growth of 8.5 percent +/- 0.25 percent during 2010-11", the minister said.
Following the impact of the global financial crisis, the economic growth rate slipped to 6.7 percent during 2008-09 from over 9 percent during the preceding three years.
On the 13th Finance Commission report, Mukherjee said the Centre was ready to adopt most of the recommendations of the Commission.
"Government of India, despite the strains, has accepted recommendations of the Finance Commission," Finance Minister Pranab Mukherjee told reporters here.
The Commission in its report, tabled in Parliament, recommended increase in share of states to 32 per cent of central tax proceeds from the current 30.5 per cent. "The states will get 1.5 percent (of the net proceeds of union taxes) more."
“The commission has also granted several grants over the five years. About 3.19 lakh crore additional grants will be given over the five years,” the minister added.
Notably, for the first time, as recommended by the 13th Finance Commission and okayed by the Centre, the local bodies will get a percentage share of the Union revenues – about Rs 87,000 crore.
The Commission also prescribed some other grants for elementary education, state-specific needs etc, besides Rs 30,000-50,000 crore as part of compensation to states for proposed GST roll out.