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Montek on why 9% growth is not possible in 5 years
Because of deteriorating global economic situation, achieving average growth rate of 9 per cent in the next five years is not possible, and it may be 8-8.5 per cent, Planning Commission Deputy Chairman Montek Singh Ahluwalia said on Friday.
"It is not possible to think of an average of 9 per cent (in 12th Plan, 2012-17). I think somewhere between 8 and 8.5 per cent is feasible," Ahluwalia said on the sidelines of a conference of state planning boards and departments.
Last year, the Planning Commission got the approval for the 9 per cent annual average economic growth target under the Approach document for the 12th Plan from the country's apex decision making body, the National Development Council, headed by the Prime Minister with all the chief ministers and Cabinet ministers on board.
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Montek on why 9% growth is not possible in 5 years
"When I say feasible. . .that will require major effort. If you don't do that there is not God given right to grow at 8 per cent," he added.
He further said, "I think given that the world economy deteriorated very sharply over the last year. . .the growth rate in the first of year of the 12th Plan (2012-13) is 6.5 to 7 per cent."
He indicated that soon he will hold discussions with members of the Commission to set the final growth target, and put it before the NDC for approval.
He said the work on the 12th Plan document is on track and it would be tabled before NDC for approval by September.
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Montek on why 9% growth is not possible in 5 years
"We have targetted the National Development Council meeting in September. I think we are on track," he said.
Before going to NDC, there would be full Planning Commission meeting that will be presided over by the Prime Minister and Cabinet Ministers to approve the document.
Ahluwalia said, "We believe that we can do that (full Planning Commission meeting) any time after the end of July.
"I am hopeful that the Planning Commission will have approved the 12th Plan in second half of August. It has to go to the Cabinet. But since full Planning Commission includes all major Cabinet ministers, we are assuming that process (Cabinet approval) will be very quick."
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Montek on why 9% growth is not possible in 5 years
About the inflation target, he said that it should not be more than 5 per cent.
The commission will retain its poverty reduction target in the 12th Plan as it was in the 11th Plan.
"I believe that we will certainly target substantial reduction. We need a little more work to get to that. Last time (for 11th Plan), we had said 10 per cent. I think 10 per cent is a pretty good target which would mean two per cent decline every year during the 12th Plan period," he added.
About boosting farm output, he said the commission would also retain agriculture growth target of four per cent in the current five year Plan.
"Agriculture growth target during the 12th Plan would be four per cent because achieving more that would be difficult," he added.