Economy to expand over 5%, average 8% growth rate to be revisited
New Delhi: The Planning Commission on Friday said it will revisit annual average GDP growth target of 8 percent for the 12th Plan (2012-17) in view of dismal performance in first two years of policy period, while saying the economy is likely to expand by over 5 percent this fiscal.
"We have not made a short term estimate. We are relying on whatever Finance Ministry is saying. At the moment I don't see any reason to disagree with what Finance Ministry is saying," Commission's Deputy Chairman Montek Singh Ahluwalia said on the growth projection for this fiscal.
He was speaking on the sidelines of a conference here.
Earlier this month, Finance Ministry had said that Indian economy will grow by over 5 percent in the current fiscal on back of high farm productivity and investments.
"It (GDP) will be more than 5 percent, it cannot be less than 5 percent," Economic Affairs Secretary Arvind Mayaram had said.
When asked whether economy would growth at a rate over 5 percent this fiscal as projected by the Finance Ministry, Ahluwalia replied, "It is not ruled out. That is what I hope."
Reeling under the impact of slowdown, Indian economy grew by 5 percent in 2012-13, the first year of the 12th Plan. The first quarter (April-June) economic growth in this fiscal has slipped to 4.4 percent from 4.8 percent in the previous January-March quarter.
When asked about possible tinkering with the annual average economic growth target of 8 percent in the 12th Plan, Ahluwalia said, "The Planning Commission will certainly revisit the growth prospects."
"I remain of the view that the medium term 8 per cent average economic growth remains valid but it will take longer to get there because (the growth in) first two years have been disappointingly low," he added.
As per the practice, the Commission comes out with a mid-term review of Plans during the third financial year of the policy period.
In its last mid-term review, the Commission had cut the annual average growth rate target of 9 percent to 8.2 percent for the 11th Five Year Plan period (2007-12). But only 8 percent average annual economic growth was achieved during the Plan period.
The 12th Plan document itself talks about the different growth scenarios. It said that in absence of sufficient action to promote economy, the average growth would range from 6 to 6.5 percent.