The Prime Minister, Dr Manmohan Singh, on Saturday cautioned that “difficult decisions” will have to be taken in order to achieve an annual GDP growth of 9 per cent during the 12th Plan. The plan is scheduled to start from April 1, 2012.
Chairing the full meeting of the Planning Commission to discuss the approach paper to the new plan, the PM said, “It has proposed that we should set the 12th Plan target at 9 per cent. In fact, the Commission has pointed out that given the uncertainties in the global economy and the challenges in the domestic economy even a 9 per cent target is feasible only if we can take some difficult decision.”
The Prime Minister has said high growth will depend crucially on growth in energy supply and efficiency of its use. Pointing out that since domestic energy supply is limited, dependency on energy import will grow, the PM said, “Rational energy pricing will help achieve both objectives even though it may seem difficult to attempt.” This is being seen as an exhortation to reduce or eliminate subsidies.
Dr Singh also stressed on the need for greater public investment and public-private partnerships for infrastructure development. The Planning Commission estimates an investment requirement of $1 trillion for the infrastructure sector. It hopes that nearly 50 per cent of the requirement will come from the private sector alone.
Briefing reporters after the meeting, the Deputy Chairman of the Planning Commission, Mr Montek Singh Ahluwalia, said although the 12th Plan aims for 9 per cent growth, if global uncertainty recedes at the beginning of the Plan period, the target could be reviewed and revised to 9.2 per cent
Mindful of global uncertainty affecting fund inflows, Mr Ahluwalia believed that we should not be grim about it. He hoped that as soon as the global situation improves, funds are certain to flow in.
Mr Ahluwalia estimated that the average inflation during the 12th Plan would be in the range of 5 per cent. This is on the assumption of 9 per cent average GDP growth. However, he said the supply side needs a lot of improvement in order to check inflation.
Talking about agriculture, Mr Ahluwalia hoped that it would grow by 3.3 per cent during the 11th Plan in comparison to 2 per cent during the 10th Plan. Now, the target for 12th Plan is 4 per cent, the Deputy Chairman added.