Mumbai: The Planning commission on Thursday hinted
at contraction of plan programmes in the remaining period of
the 11th plan ending 2012, due to lesser budgetary support in
the face of falling growth.
With the average growth expected to decline to 7.8 per
cent from the projected 9 per cent during 2007-12,the planning
commission is likely to fine tune the plan for the remaining
period, its member Narendra Jadhav said.
This fine-tuning and reprioritizing has to be done in
the mid-course because of lesser gross budgetary support(GBS)
available for the plan programmes owing to lower average
growth during 2007-12, Jadhav told reporters.
"The gross budgetary support was formulated assuming a
9 per cent growth (during 2007-12)...now the average growth is
likely to be 7.8 per cent and this meant revising downwards
the gross budgetary support," Jadhav said.
Gross Budgetary support is the money allocated to
execute plan programmes in the budget every year and the
availability of funds for GBS depended upon the revenue
mobilisation efforts of the Government.
Whenever there is a fall in growth, there is a
corresponding fall in revenue collection.
India is likely to grow at 6.3 per cent in FY 10
despite the impact of the global financial crisis and the
drought, a he said.
"We estimate that growth this year (2009-10) will
be 6.3 per cent," Jadhav said.
The growth is likely to improve further in the next
financial year to 8 per cent and may bounce back to nine per
cent in the year after, Jadhav said while delivering a
However, the rainfall in September remains critical to
sustain a 6.3 per cent GDP growth, Jadhav said.
"If it not rains well in September, the growth may
decline to six per cent," he said.
Reserve Bank, in it annual report last month, had
maintained the growth target of 6 per cent for FY 10 despite
weak monsoon, saying that economic impact of the drought will
not be as bad as expected.
Hit by the financial crisis, advanced economies are
likely to grow in negative in the rest of the current
financial year, he said.
Jadhav noted that a 7.8 per cent average growth is
"truly impressive" in spite of the double-whammy of slowdown
and drought, he said.