Plan panel to moot lowering growth rate to 8%

New Delhi: With the economy slowing down and figures for the year not optimistic, the Planning Commission plans to seek lowering of the growth rate for the 12th Five Year Plan to 8 per cent at the meeting of the National Development Council (NDC) here today.

“Our objective is that we 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 at 8 per cent.” Planning Commission Deputy Chairman Montek Singh Ahluwalia said.

“I would raise that issue in the NDC,” he added.

The economy in the first half of the current fiscal 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 the decade.
The scaling down of the growth target, Ahluwalia said, follows changes in the global and domestic economy since the approval of the Approach Paper by the NDC in October last year.

This is the second time that the Commission will be scaling down growth projection for the 12th Plan (2012-17).

After initially estimating the growth rate at 9 per cent in the Approach Paper, it lowered the target to 8.2 per cent in September 2012 in view of global economic worries and persistent sluggishness in domestic growth.

The issue will be considered tomorrow by the country’s highest policy making body NDC, which is headed by Prime Minister Manmohan Singh and comprises Cabinet Ministers and Chief Ministers of all states.

In the 11th Five Year Plan, the average annual growth rate was 7.9 per cent.
Justifying the Commission’s proposal to lower the growth target, Ahluwalia said to achieve the 8 per cent target the economy has to clock nine per cent growth in the last three years of the Plan period.