The government on Thursday admitted there were "pressure points" in the economy due to mounting food and petroleum subsidies, but said the growth would be "significant" this year due to good monsoon and industrial revival.
"There are some pressure points largely on account of subsidies in food and some petroleum products," the quarterly review of economy, tabled in the Parliament, said.
Developments in the first quarter of this year were encouraging, it said, adding, "This year should witness significant growth coupled with macro-economic stability."
Noting that there was accelerated improvement in the tax administration, the review, presented to the Parliament for the first time vowed that no slippage shall be permitted in bringing about such improvements.
The review follows the passage of the Fiscal Responsibility and Budget Management Bill recently, which makes it mandatory for the government to review trends in receipts and expenditure every quarter.
Stressing that the economy was on a growth path in conformity with the budget expectations, the review said good monsoon should reverse the declining agricultural output making the farm growth robust.
Other sectors like industry and services would benefit from this growth, it said noting that the index of industrial production was up by 5 per cent in the first two months in the current year as compared to 4.1 per cent in the year-ago period.
Subsidies, however, registered a growth of 62 per cent in the first quarter mainly due to a large outgo of Rs 1,680 crore (Rs 16.8 billion) on account of subsidies on kerosene and LPG as well as food and fertiliser.
Fiscal deficit till June this year was only Rs 38,608 crore (Rs 386.08 billion), which was lower by Rs 952 crore (Rs 9.52 billion) when compared to the previous year.