Considering Sulky Economy, average growth rate may be reduced for 12th Plan

Citing the sulky economy the Planning Commission is thinking to scale down the annual average growth rate target to 7 percent from the envisaged 8 percent in the 12th Plan (2012-17) in mid-term review of the five-year policy.

In recent annual plan discussions with Chief Ministers the Commission's Deputy Chairman, Montek Singh Ahluwalia, took inputs from states for the mid-term review. Meanwhile, it is already half way through with the Annual Plan outlay discussion and it has already approved such outlays for over 15 states so far.

As per the CSO's advance estimates, the Indian economy would grow by 5 per cent in the 2012-13, the first year of 12th Five year Plan.

With a growth rate of 5 percent in 2012-13 and expected growth between 6.1-6.7 percent in 2013-14 in the first two years of the 12th plan. This leaves Indian economy to grow by 9.7 percent in the remaining three years 12th Plan, which seems not feasible. It seems impossible for India to grow at 8 percent on an average in this plan.

So the commission may scale down the average growth  rate from estimated 8 percent to 7 percent, which is more possible in current scenario.

The Commission has earlier also scaled down the annual average growth rate of 9 percent envisaged in the 11th Plan to 8.1 percent in view of the global economic meltdown that began in 2008.

According to official estimates, India achieved an economic growth rate of around 8 percent during the 11th Five Year Plan period (2007-12).