Panel to lower 12th plan GDP target
15 Aug 2012 8:10 AM IST
Planning Commission has decided to lower annual growth target for the 12th Five Year Plan (2012-17) to 8.5 per cent from 9 per cent 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 per cent in the 12th Plan as it will be difficult to achieve 9 per cent’, a source privy to the development said.
It would suggest lowering of the annual growth target at meeting of the full Planning Commission on 15 September. The meeting would be presided over by the Prime Minister. The growth target for the agriculture sector, however, would be retained at 4 per cent 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 per cent 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 per cent.
The Plan document will finally be approved by the National Development Council 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 per cent. In June, it dropped by 1.8 per cent.
The economic growth rate plunged to a nine-year low of 6.5 per cent in 2011-12 and it is not likely to improve this fiscal.
'CHALLENGE IS TO RESTORE INVESTOR CONFIDENCE'
The Planning Commission on Tuesday said the biggest challenge before India is to improve investment climate, and the initiative taken by the government in setting up a review panel on GAAR has sent the right signal.
‘Globally there is an environment that investors are nervous. It is very important that we should do the most we can to present a positive picture of our economic situation that we are welcoming foreign investors,’ Planning Commission deputy chairman Montek Singh Ahluwalia said.
Ahluwalia further said the initiatives taken by the Prime Minister to set up a new committee on the controversial General Anti-Avoidance Rules (GAAR) has sent a signal which has been received well by the investors.
Introduction of GAAR, which was proposed by then finance minister Pranab Mukherjee in the Budget 2012-13 to check tax evasion, had triggered outrage by foreign investors following which its implementation was postponed till April 2013.
Ahluwalia said the government is taking steps to fast-track the infrastructure project clearances and come out with credible fiscal consolidation roadmap.
‘On the issue of implementation of major projects, the govt will take appropriate measures... I do not think that we have high deficit, or we had. The real concern we have is that do we have credible policy,’ he said.
‘The Commission is of the view that annual growth target should be 8.5 per cent in the 12th Plan as it will be difficult to achieve 9 per cent’, a source privy to the development said.
It would suggest lowering of the annual growth target at meeting of the full Planning Commission on 15 September. The meeting would be presided over by the Prime Minister. The growth target for the agriculture sector, however, would be retained at 4 per cent 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 per cent 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 per cent.
The Plan document will finally be approved by the National Development Council 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 per cent. In June, it dropped by 1.8 per cent.
The economic growth rate plunged to a nine-year low of 6.5 per cent in 2011-12 and it is not likely to improve this fiscal.
'CHALLENGE IS TO RESTORE INVESTOR CONFIDENCE'
The Planning Commission on Tuesday said the biggest challenge before India is to improve investment climate, and the initiative taken by the government in setting up a review panel on GAAR has sent the right signal.
‘Globally there is an environment that investors are nervous. It is very important that we should do the most we can to present a positive picture of our economic situation that we are welcoming foreign investors,’ Planning Commission deputy chairman Montek Singh Ahluwalia said.
Ahluwalia further said the initiatives taken by the Prime Minister to set up a new committee on the controversial General Anti-Avoidance Rules (GAAR) has sent a signal which has been received well by the investors.
Introduction of GAAR, which was proposed by then finance minister Pranab Mukherjee in the Budget 2012-13 to check tax evasion, had triggered outrage by foreign investors following which its implementation was postponed till April 2013.
Ahluwalia said the government is taking steps to fast-track the infrastructure project clearances and come out with credible fiscal consolidation roadmap.
‘On the issue of implementation of major projects, the govt will take appropriate measures... I do not think that we have high deficit, or we had. The real concern we have is that do we have credible policy,’ he said.
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