12th Plan to target 9-9.5% GDP: Montek

The 12th Five-Year Plan, to start from next financial year, is likely to peg economic growth rate somewhere between 9 and 9.5 per cent.

However, 10 per cent economic growth rate does not seem feasible, Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters here, a day before full Plan panel is to meet under the chairmanship of Prime Minister Manmohan Singh.

It should be noted here the prime minister wanted the next plan to aim for average 10 per cent growth per annum to mitigate poverty and provide employment to the youth.

The ongoing 11th five year plan had aimed to take economic growth to 10 per cent in the final year of the plan, the ongoing financial year. This target was later revised to little over 8 per cent, after crisis hit the Indian economy.

“If you ask me personally, I think setting target of 10 per cent (GDP growth) as an average for 12th Plan, is not feasible. We have to make a reasonable assessment of the situation. It will be somewhere between 9 to 9.5 in next Plan period,” Ahluwalia said.

Indian economy recorded close to 9.5 per cent growth in three consecutive years before it received ripple effects of global financial meltdown, particularly from mid-September 2008, when Lehman Brothers collapsed.

In fact, India’s economy had expanded by 10 per cent (10.2 per cent to be precise) only once in 1988-89.

A bit slower growth may also be required to cool off inflation, which is ruling at around 9 per cent last financial year-end, against Reserve Bank of India (RBI) projections of around 8 per cent.

“We are concerned about inflation risks. It is not in a comfortable range. But we should see that strategy to push high growth cannot be at the risk of high inflation, which is not good as it hampers the poor,” he said.

Ahluwalia said the Plan panel is confident of achieving four per cent annual average growth in agriculture during the 12th plan.

“In the 10th Plan, it (agricultural growth) was around 2 per cent and in the 11th Plan, it looks as if it will be 3 per cent...It won’t be 4 per cent that we had targeted. We are confident of 4 per cent growth in 12th plan,” he said.

He admitted progress in inclusive growth is not at desired level. He added gender ratio was a concern. According to Census 2011 report, child (0-6 six years) sex ratio is 914, lowest since Independence.