In 2013, deprived economic growth in India disrupted the ambitious targets of Planning Commission.
Nation’s official think-tank will revise the target to downwards, which earlier was 8 per cent for 12th plan.
Montek Singh Ahulwalia, Deputy Chairman, Planning Commission said that 12th plan’s target could be lowered to around 7.5 per cent owing to attributing lower than expected economic growth to global factors.
Further, Planning Commission is to conduct the midterm review of the 12th plan by the end of 2014, concerned preparatory work has already commenced.
Ahluwalia further added, “In the 12th Plan for the first time, upper-end performance was going to be around 8 per cent average in a year but since then global economy has done much worse. So, today 8 per cent is bit on the high side. The possibility for next five years I feel is 7.5 per cent which is not impossible”.
Showing slowest growth in a decade, India’s economy grew only 5 per cent, during 2012-2013, the first year of 12th plan. In H1 of the current fiscal FY14, the economy rose by just 4.6 per cent.
According to 12th plan document, considering slow economic growth in earlier phase of the plan, it will require a very sharp acceleration in the later years to achieve an average of set target of 8 per cent. During booming global economy for 5 years before 2008, Indian economy grew at over 9 per cent.
Government is to set up the Cabinet committee on investment to deal with situations where clearances concerned to infrastructure projects were overly delayed. Infrastructure is considered to be major thrust to fuel economic growth & hence promoting economic activities. Commission has also proposed to control economic imbalances, to overturn the slowdown & pushing for structural reforms to sustain medium term growth. Ahluwalia remains optimistic, considering aforementioned steps for economic turnaround, which is also supported by good agricultural production this year. The chairman is expecting to see recovery in coming quarters.
Worth noting the growth in China’s economy, which is probably around 7.6 per cent in 2013, according to a government report. It is slightly above its official target for the year and just below last year’s performance (7.7 per cent).