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12th Plan growth target to be lowered to 8%, says Montek

Source : BUSINESS_STANDARD
Last Updated: Wed, Dec 26, 2012 19:31 hrs

Even as the Planning Commission moves ahead to seek the National Development Council (NDC)’s approval to lower the average annual growth rate to eight per cent for the 12th Plan (2012-17) from the earlier anticipated 8.2 per cent, Deputy Chairman Montek Singh Ahluwalia said on Wednesday the broad thrust of the Plan would not alter.

“As of now, we are staying with the broad parameters of the 12th Five-Year Plan as proposed in the draft,” Ahluwalia told reporters, adding estimates of available resource for the Plan were not being immediately reduced.

The draft 12th Plan document showed that to achieve a targeted average annual growth rate of 8.2 per cent, the country would need around Rs 84.8 lakh crore at current prices for the Centre and states taken together.

On lowering the growth target, Ahluwalia said the Planning Commission’s objective was that it should be going in for a more optimistic scenario. “And probably if we reflect, what we now know (is that) instead of 8.2 per cent, it would be better to pitch it (average annual growth rate) at eight per cent.”

The economy in the first half of the current financial year grew at 5.4 per cent, lower than 7.3 per cent growth recorded in the corresponding period last year. For 2012-13 as a whole, which would be the first year of the 12th Plan, the growth rate has been estimated at 5.7-5.9 per cent, which would be the lowest in a decade.

The scaling down of the growth target, Ahluwalia said, followed changes in the global and domestic economy since the approval of the approach paper by NDC in October last year.

This is the second time that the commission will be scaling down growth projection for the 12th Plan. After initially estimating the growth rate at nine per cent in the Approach Paper, it lowered the target to 8.2 per cent in September in view of global economic worries and persistent sluggishness in domestic growth.

On the Rangarajan committee report on estimating poverty, Ahluwalia said it was likely to be submitted to the commission by June 2013.

The 12th Plan aimed to reduce poverty by 10 percentage points during the five years, he said, adding the Commission would also circulate a Cabinet proposal to reduce the number of centrally-sponsored schemes from 147 to 59.

The deputy chairman also said Bihar did not meet the existing criteria to be granted the status of special category state. Chief Minister of Bihar Nitish Kumar last week said he would raise the demand for special status at the NDC meeting.




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