Mid-term review of 11th Plan by Dec-end: Montek

Concedes that drought will impact countrys economic growth this fiscal

Addressing an interactive session under the aegis of Federation of Karnataka Chamber of Commerce & Industry (Fkcci) here, Ahluwalia said, “you cannot let loose policy making decision and economic affairs in the hands of private sector.”
Stating that the Centre must have a say in policy prescriptions and directions stimulating growth, he said, private sector can be leveraged where there is scare of resources, specially in infrastructure growth.
“Private sector alone cannot solve country’s economic problems,” while their assistance could be solicited to develop infrastructure through public-private partnership model, he observed.

The issue is how one goes about financing modern infrastructure, whose absence is impinging growth, but you cannot expect government to subsidise urban services doing away with targeted subsidies, he noted as it has a larger social responsibility.
In this regard, he said, the real test of economy is not how good growth has been or will be, but to ensure that it is not low. “India is a remarkable example of how resilient its economy has been even in the face of global and domestic economic crises.  Stating that the planning commission would undertake mid-term appraisal of 11th Five Year Plan by year-end, he said, this would provide the opportunity to reflect upon how success or not it has been so far and take corrective steps given the changed circumstances.

Reasonable growth
Pointing out that it would be reasonable if country’s economic growth clocked seven per cent growth next year, he said, while there has been no negative growth due to global fiscal crisis, there has, however,  been sharp reduction from earlier 9 per cent growth rate to 6 to 6.5 per cent now.
While drought would have its negative impact on the economy this year and thereby  seven per cent growth unattainable, he said, the country was, however, much better prepared to face the drought. Observing that while there will be reduction in foodgrains production, it would not affect distribution as there was adequate food stocks in the system, hesaid. But the reduction in output will impact farm income in turn affecting spending, he added.