'India won't meet infra investment target'

The Planning Commission on Monday said India would not be able to achieve the $1-trillion target for investment in the infrastructure sector during the 12th Plan period (2012-17), in view of the lower economic growth prospects.

“The earlier figure was based on the nine per cent growth target and if the growth target is less, it (investment target) does not have to be the same number,” Planning Commission Deputy Chairman Montek Singh Ahluwalia said, when asked about trimming of the investment target.

"Obviously, if the five-year perspective is lower than nine per cent, then investment requirement would also be lower. I don't think that $ 1 trillion should be seen as sacrosanct figure. I don't regard the $ 1 trillion figure as some kind of figure written in stone," he said.

 

“The figure was given two years ago when the rupee-dollar exchange rate was Rs 44. So, we are calculating what is needed in rupees. So, the dollar equivalent of that is bound to change," Ahluwalia said.

The Commission had set the $1 trillion target with an assumption that the economy would grow at nine per cent yearly during the 12th Plan period.

"The cumulative investment in infrastructure in the 12th Plan is targeted at around $1 trillion. Nearly half of this investment will be channelised into construction projects," the Commission had stated in its approach paper. The paper was approved by the country's apex decision making body, the National Development Council (NDC) last year.

About growth prospects, Ahluwalia said: "Given the situation around the world and our own domestic current growth prospects, I think achieving nine per cent for five years is just not going to be feasible."