Finance ministry today said the CSO has underestimated GDP growth rate for current financial year and exuded the confidence that economic expansion will exceed 5.5 per cent.

"It is likely that the advance estimates of 5 per cent will be revised and the final estimate will be closer to the government's estimate of a growth rate of 5.5 per cent or slightly more," the Finance Ministry said.

The Central Statistical Organisation (CSO) has "probably underestimated" the growth for the current fiscal and estimates are likely to be revised upwards in the final projections, the ministry said in a statement.

In advance estimates for 2012-13, the CSO has projected economic growth rate of 5 per cent, the lowest in the decade. In the previous fiscal GDP grew by 6.2 per cent.

The finance ministry said CSO's advanced estimates have often been revised either upwards or downwards because it takes into account the data till November or December.

"... This makes its estimates accurate when GDP growth is following a trend, but not when it is turning. So, for example, growth was overestimated as the economy slowed in 2008-09 and 2011-12, while it is probably underestimated now," the statement said.

The finance ministry had earlier projected a growth rate of 5.7-5.9 per cent, while the Reserve Bank in its latest review has pegged it at 5.5 per cent for the current fiscal.

Quoting various data, the ministry said that there are signs of recovery and upturn in the economy. It said the Purchasing Manager's Index (manufacturing) has started moving up since October 2012 and industrial output too has started stabilising.

The growth in excise duty and service tax collection was also high at 16 per cent and of 33 per cent respectively in April-December 2012. Moderation in inflation to 7.2 per cent also shows early signs of economic upturn.