Bangalore: Global recession and drought this fiscal will derail India's nine per cent growth target for the 11th Five Year Plan (2007-2012), says a top Planning Commission official.
"We set a growth target of 9 per cent to 10 per cent for the 11th Plan. Though we began well in the first year (2007-2008), the global meltdown impacted the growth rate in the second year and a drought this year will hamper it even more," said Planning Commission Deputy Chairman Montek Singh Ahluwalia.
The robust nine per cent growth rate in 2007-2008 slipped to 6.7 per cent last fiscal and is projected to fall to 6.5 per cent this year.
"If the growth rate for two consecutive years is about 6 per cent to 6.5 per cent on an average, the economy has to grow by 11 per cent in the remaining two years of the Plan period to achieve the nine-per cent target, which I don't think is possible," Ahluwalia said.
The commission will revise the growth target when it meets in December for a midterm appraisal of the 11th Plan, with a better assessment and a course correction this fiscal.
"We will see what adjustment needs to be done during the midterm appraisal. We should not regard the decline in growth as a failure or weakness, because contributing factors like global meltdown and a weak monsoon are beyond our control," said Ahluwalia.
The first meeting of the reconstituted Plan panel on Tuesday in New Delhi, under the chairmanship of Prime Minister Manmohan Singh, will set the tone for the midterm appraisal of the 11th plan after factoring in India's economic health.
Admitting it was difficult to meet a five-year target when the external environment changed midstream, Ahluwalia said the priority was to ensure the growth path was on sustainable ground.
"Our economy is going through two difficult years and the world economy will take a year more to recover from the global recession. The measures taken by the government during the past eight months are aimed at a stronger economic performance though we have a lot of work to do," he said.
Clarifying that planning was not a mechanical exercise undertaken once and adhered to it for five years, Ahluwalia said a midterm review was essential for course correction.
"Global recession and drought are unforeseen events that disrupt growth momentum and the cyclical nature of many economic sectors. Midterm appraisal will allow us to redefine priorities and review policies."
A weak monsoon and slowdown are feared to limit the growth rate of the Gross Domestic Product to less than seven per cent this fiscal.
"Though drought will be a problem this year, we expect a strong rebound in the farm sector next year. But for the weak monsoon, the growth rate would certainly have been above seven per cent this fiscal," Ahluwalia said.
Even as a drought looms large, with loss of farm production, lower income for farmers and fall in demand for goods and services, he said food stocks were adequate.
"With five million tonnes buffer stock as strategic reserve, the government should be able to manage food grain shortage arising out of lower production and monsoon blues."
Comments
0 comment