The Planning Commission Thursday said the economic growth is unlikely to slip to 5 percent in the current fiscal as things are set to improve in the second half of 2012-13.
New Delhi: The Planning Commission Thursday said the economic growth is unlikely to slip to 5 percent in the current fiscal as things are set to improve in the second half of 2012-13.
"I don't think growth would come down to 5 percent in the current fiscal... The government is taking number of steps which will bring growth up. We would expect to see an improvement," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters here, after a meeting with Finance Minister P Chidambaram.
The 12th Plan (2012-17) draft document, which will be placed before the meeting of Full Planning Commission, which will be chaired by Prime Minister Manmohan Singh on Saturday, has reportedly warned that persistent "policy logjam" could pull down the growth rate to 5 percent.
The Commission is aiming an average annual growth of 8.2 percent during the 12th Plan.
India's economic growth in the first quarter (April-June) this fiscal stood at 5.5 percent. Although it was much lower than 8 percent in the corresponding period last fiscal, the growth showed improvement on sequential basis. The growth rate in January-March was 5.3 percent.
Meanwhile, Law Minister Salman Khurshid, who met Chidambaram earlier in the day, indicated that the government would be taking important decisions to boost the economy.
"The government should take far reaching decisions now and that's what all of us expect... This is a time we need to set the economy right. Finance Minister would want some important decisions to be taken," Khurshid said.
India's economic growth had slowed to a nine-year low of 6.5 percent last financial year and as per the general expectation, economy is unlikely to do much better in the current fiscal.
Industrial output in the April-July period of this fiscal has thus contracted by 0.1 percent, according to the recent official data.
In view of fragile economic recovery, Plan panel had decided to lower annual average economic growth rate to 8.2 percent in the 12th Five Year Plan (2012-17) from 9 percent envisaged earlier.
"Our view is that if we can bring about strong turnaround in the current year, then accelerate it up then we hope it would be reasonable to target 8.2 percent growth in 12th Five Year Plan (2012-17)," Ahluwalia said.
He added that to achieve 8.2 percent growth in the next five the government would have to take far reaching decisions.
"...To do that (8.2 percent growth in 12th Five Year Plan) you have to do large number of reform," he said without elaborating.
He further said, "Short-term difficulties are important... While we are taking corrective steps, we are making the point that we should not become pessimistic about growth in the medium term just because we are going through difficulties".
Scaling up growth would require lot of action, he said, adding, "We are putting down all in the Plan document. I hope that will be endorsed by the members (on Saturday).
"We are also emphasising that if we don't do what is necessary then you should not assume that 8.2 percent is going to happen," he added.