New Delhi: Planning Commission has decided to lower annual growth target for the 12th Five Year Plan (2012-17) to 8.5 percent from 9 percent envisaged earlier in view of sluggish economy and fragile global recovery.
"The Commission is of the view that annual growth target should be 8.5 percent in the 12th Plan as it will be difficult to achieve 9 percent", a source privy to the development said.
It would suggest lowering of the annual growth target at meeting of the full Planning Commission on September 15. The meeting would be presided over by the Prime Minister.
The growth target for the agriculture sector, however, would be retained at 4 percent for the five-year Plan period, the source said.
As regards the manufacturing sector, the source said, the growth target could be increased to 10.5 percent in view of the initiatives being taken by the government to put in place the National Manufacturing Policy. Earlier, the Commission had pegged the sector's growth at 9.8 percent.
The Plan document will finally be approved by the National Development Council (NDC) to be convened sometime in October.
The decision to lower annual growth target for 12th Plan follows economic slowdown and declining industrial growth in the current fiscal. Due to the impact of global problems and slowing exports, the industrial production during April-June declined by 0.1 percent. In June, it dropped by 1.8 percent.
The economic growth rate plunged to a nine-year low of 6.5 percent in 2011-12 and it is not likely to improve this fiscal. The Reserve Bank has projected the growth rate at 6.5 percent, lower than its earlier estimate of 7.3 percent.
In view of the ongoing problems in the global economy, especially in the US and eurozone area, the exports plunged by 14.8 percent, recording the steepest fall in the last three years.
First Published: Tuesday, August 14, 2012, 18:57