$500 bn private investment must for 8% growth in 12th Plan: Montek

Planning Commission has envisaged an investment of around $1 trillion in the 12th Five Year Plan

India will not be able to achieve the targeted 8% annual average economic growth in 12th Plan (2012-17) if private sector does not invest half of the envisaged $1 trillion dollar in infrastructure during the period,  Plan panel Deputy Chairman Montek Singh Ahluwalia said here today.

"This (8% annual average economic growth rate in 12th Plan) will not happen if roughly 50% (of investment target of $1 trillion) cannot come from private sector", he said addressing a FICCI conference here

Planning Commission has envisaged an investment of around $1 trillion in the 12th Five Plan with half of it coming from the private sector and set an average annual growth rate target of 8% in the five year period.

"We should be clear about it that there is no prospect or zero prospect of being able to significantly increase government contribution (to invest in infrastructure) simply because resources won't be there as the demand for resources for health and education is huge", Ahluwalia explained.

According to Ahluwalia, the economy has to grow at 9% in the last few years of the Plan period to achieve the 8% average growth target.

"If the intention is to put the economy on to a path which is outlined in the 12th Plan (2012-17) that you would have average of 8% (growth rate) in the five year period, then you have to put the economy on 9% growth rate in the last couple of years", he added.

According to CSO's advance estimates, economy would grow at 5% 2012-13, the first year of the 12th Plan. The Prime Minister's Economic Advisory Council has pegged the economic growth at 6.4% in the current fiscal.