Plan panel projects 7 per cent GDP growth in 2009-10

"There are already signs of improvement. We can hope for better GDP growth rate in the current fiscal. May be it will be nearer to 7 per cent," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters here.

The Reserve Bank of India, however, in its annual credit policy statement, has projected 6 per cent GDP growth rate in the current fiscal in view of continuing global recession.

"The economy clocked 6.7 per cent growth rate in 2008-09. This is pretty good. Many international institutions had projected low growth rate in the range of 5 and 6 per cent.
But finally economy performed better in the face of global slowdown," Ahluwalia said.

Pointing out that the economy could at least expect to reach the same level of GDP growth as achieved in 2008-09 in the current fiscal, he said prospect of a still higher growth rate would depend on revival of the global economy.

Reasons for optimism

"There are now indications that the global economy will witness some revival in the second half of this year. It will definitely help our economy to post better growth rate," he added.

Explaining reasons for optimism for higher growth rate, he said "the installation of stable government had fueled hope for better growth. The Indian industry is now confident of improvement in the economy."

Asked about immediate tasks facing the plan panel, Ahluwalia said it was now working on giving the inputs for fixation of plan expenditure in the forthcoming Budget for 2009-10. "In the interim budget there has been a reasonable hike in the total plan expenditure to boost growth. We are looking at possibility of further hiking the plan expenditure in such sectors, which have shown the capacity of absorption. However, the overall fiscal space that can allow further rise in expenditure, has to be taken into account," he said.

In regard to mid-term appraisal of the Eleventh Plan (2007-2012), Ahluwalia said "we will take up the mid-term appraisal exercise as soon as possible."

Asked whether phenomenon of impact of global recession would be factored into the mid-term appraisal, he said "there will be no change in the objective of the Eleventh Plan. But we will definitely look at the possibility of making modifications in
developmental strategies in various sectors in the light of impact of recession." "Some of these medications may find reflection in the Budget 2010-11," he indicated. In regard of roadmap of PSU disinvestment as indicated in the President's address Ahluwalia said "it is a rational approach. The timeframe (of disinvestment) will be decided by the Finance Ministry."

Asked about decontrol of oil pricing mechanism, he said "the only way to tackle the oil subsidies is to link oil pricing to global pricing. But at the same time we will have to provide fuel to the poor at an affordable price in a fool-proof targeted manner."

Citing proposed Smart Card in this context, Ahluwalia said "the proposed ID card for all citizens can help us in targeting the subsidized fuel for the poor."