New Delhi: The Cabinet Thursday approved the mid-term appraisal (MTA) of the Eleventh Five-Year Plan (2007-12), which scaled down the average growth target of the economy to 8.1 per cent from 9 per cent.
The MTA will now be placed before the National Development Council (NDC), the highest policy making body in the country headed by the Prime Minister.
"The Cabinet has approved the proposal of the Planning Commission to put the MTA of the current five year Plan before the NDC," Information and Broadcasting Minister Ambika Soni told reporters here.
The mid-term appraisal (MTA) was placed before the full Planning Commission meeting headed by Prime Minister Manmohan Singh on March 23.
In the MTA document, the commission had lowered the growth rate for the current plan to 8.1 per cent from 9 per cent in the wake of the global financial crisis that slowed
the rate of economic expansion.
The commission had projected in the MTA that the economy would expand by 8.5 per cent in the current fiscal and rise to 9 per cent in 2011-12.
It is a practice that after getting the full Planning Commission`s clearance, the MTA document is placed before the Cabinet and thereafter before the National Development Council (NDC) for final approval.
Headed by the Prime Minister, the full Planning Commission comprises key Cabinet ministers, including Finance Minister Pranab Mukherjee and Agriculture and Food Minister Sharad Pawar, Deputy Chairman Montek Singh Ahluwalia and all the full-time members of the plan panel.
The Commission had set an average annual growth target of 9 per cent for the Eleventh Plan -- beginning with 8.5 per cent in the first year and closing with 10 per cent in the
last year of the Plan period.
The MTA document said the economy exceeded expectations in the first year of the Eleventh Plan (2007-08), with a growth rate of 9 per cent, but the momentum was interrupted in 2008-09 because of the global financial crisis.
Following the global meltdown, the growth rate slipped to 6.7 per cent in 2008-09 from over 9 per cent in the preceding three years. Thereafter, the growth recovered to 7.4 per cent last fiscal.
Buoyed by the recovery since the last meeting of the full Planning Commission in September 1, 2009, the document had said, "The economy would be well positioned for transition to a growth rate higher than 9 per cent in the XII Plan period."
In order to achieve a high growth rate, the commission suggested the government focus on fiscal consolidation and maintain an investor-supportive economic environment.