Planning Commission Deputy Chairman Montek Singh Ahluwalia today said if India had to grow at the projected rate of eight per cent in the 12th Five-Year Plan, it needed to grow at more than nine per cent rate in the last two years of the Plan period. This is because economic growth would stand at only five per cent in the first year of the Plan.
He added the Cabinet Committee on Investment would clear a number of projects in the next few weeks.
At a meeting organised by the Southern India Chamber of Commerce and Industry, Ahluwalia said: "Next year, the Budget says (growth would be) 6.5 per cent. To be on track, we have to go well above seven per cent in the following year-- 2014-15. To average eight per cent, we have to get to a rate of more than nine per cent in the last two years."
"It is acceleration - from about five per cent to about nine per cent over a four-year period," he said, adding this wasn't an unrealistic target, since the country's average underlying growth trend was 7.4-7.5 per cent, and achieving a little more than nine per cent was achievable.
This financial year, the global economy was in a bad state, he said, adding India was seeing temporarily depressed growth; a year's performance wasn't a true measure.
Critical issues related to power, especially hurdles to clearing large projects and the availability of water in the long term, had to be addressed through the Plan, he said.
The government was working on alternative ways of power pooling to solve the issue of price difference between imported and domestic coal, he said, adding while clearances such as environmental approvals for power projects were delaying projects, the availability of coal and gas also had to be considered.
Price pooling for gas was also necessary, since the difference between the prices of imported and domestic gas was very high, Ahluwalia said.
Though short-term measures by the Reserve Bank of India wouldn't present a real solution to the crisis, these could help people feel the fiscal space was improving, he said, adding the country had to rely on foreign funds in the next two to three years. This, he said, would have impact on the current account deficit. However, as interest rates in the US and Europe would be low in the near future, India could attract more investment, he said.