Even 8 percent growth target ambitious: PM

Thursday December 27, 2012 07:12:08 PM, IANS

New Delhi: Prime Minister Manmohan Singh Thursday said even the revised growth target of 8 percent for the 12th Five-Year Plan was ambitious and involvement of women and development of infrastructure remained at the core of achieving that goal.

Addressing a National Development Council meeting to finalise the Five-Year Plan and referring to the lower growth target, Manmohan Singh said circumstances had made the goal a challenge too.

"This is a reasonable modification. But I must emphasise that achieving an average of 8 percent growth, following less than 6 percent in the first year, is still an ambitious target," he said.

He said the country was reasonably successful in what it had achieved so far in growth and development, notably in poverty reduction and scaling up of farm output.

"But we must also remember that we are still a low-income economy. We need 20 years of rapid growth to bring it to middle-income level. The journey is long and requires hard work," the prime minister said at the NDC meeting at Vigyan Bhavan here.

"Better infrastructure is the best guarantee for rapid growth of the economy," he said. "There can be no meaningful development without the participation of half the population (comprising of women). Their security must be assured."

Planning Commission Deputy Chairman Montek Singh Ahluwalia said development goals in the 12th Five-Year Plan could only be achieved by proper policy implementation.

"If policy decisions are not properly implemented, growth (rate) would be limited to 6 to 6.5 percent in the 12th Plan period," said Ahluwalia.

The union government is aiming to achieve an average of 8 percent growth in the gross domestic product (GDP).

Ahluwalia had, in the approach paper for the 12th Plan, set a growth target of 9 percent, which was lowered to 8.2 percent. It has now been further lowered.

He said aspirational growth scenario now was 8 percent due to global economic factors.

The second target was 6.5 percent if key policy decisions were not implemented properly. Third was 5-5.5 percent if there was a policy logjam, he said.

But Finance Minister P. Chidambaram expressed optimism that the Indian economy would continue to grow at a healthy rate even as other economies faced recession.

"Our economy has strong fundamentals and factors such as high saving rate, growing service sector, a large middle class which continues to create demand and technical manpower and youth," he said.

Chidambaram said it was imperative to contain the fiscal deficit by augmenting resources and controlling expenditure, which might cause immediate pain, but were necessary.

He said there was also a need to control gold imports which contributed $64 billion to India's deficit.

The National Development Council is an extra-constitutional, non-statutory body.

It is the apex institution for decision-making in India, led by the prime minister, and includes cabinet ministers, chief ministers of all states and union territory representatives.

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