'Common man to be better off if 8.2% growth achieved'

As the government looks to rein in subsidies to create fiscal space, the Planning Commission on Saturday said the cut in subsidies would not hurt the real poor if average annual economic growth of 8.2 per cent was s achieved in 12th Plan period (2012-13 to 2016-17).

“The common man is better off after the 11th five-year Plan, and would be better if the first scenario of economic growth (of 8.2 per cent) is achieved,” Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters after a meeting of the Full Planning Commission chaired by Prime Minister Manmohan Singh.

He said the 11th five-year Plan, which ended in 2011-12, achieved reasonable average annual economic growth of 7.9 per cent and good performance in inclusiveness, which is shown by a decline in the rate of poverty and fast growth of per capita consumption in rural areas.

On the high current account deficit (CAD), Ahluwalia said it was true that it had exceeded the 1991-92 levels of 3.1 per cent by standing at 4.2 per cent of GDP in 2011-12; it must be realised that then India was not in anybody’s radar, but now the country is much better placed to attract foreign investment to finance CAD.

CAD is targeted to fall to 2.9 per cent by the end of 2016-17.

“If India can achieve the targeted 8.2 per cent growth in the 12th Plan period then a lot of investments would be attracted. And, as matter of fact, even if growth slips to around 7 per cent in the next few years, then also a lot of investors would be attracted as then India’s growth would be just behind China,” Ahluwalia said.

Accepting that investor sentiment in the country has gone down, Ahluwalia said investment as ratio of GDP had fallen in the last three years, but steps were being taken to revive that.

He said the 12th Plan had targeted to create 50 million new jobs in the non-farm sector and reduce poverty by 10 percentage points from the last estimate.

“Health and education, and in health clean drinking water and sanitation, would be the main thrust areas of the 12th five-year Plan,” Ahluwalia said.