Consistent with the saying that the show must go on, the Prime Minister, Dr Manmohan Singh, presided over a meeting of the full Planning Commission to discuss the Approach Paper to the 12th Five Year Plan. The paper itself hasn't been made public because it must be shown to the Cabinet first but the approach has been shared. And in his statement the Prime Minister finally relinquished his long cherished dream of India touching double-digit growth on his watch. "… the Commission has proposed that we should set the Twelfth 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 decisions.” So that's that then. The only question of interest now is how much below 9 per cent will growth be. Given that the savings rate is likely to be maintained at the current level of around 37 per cent, an incremental capital output ratio of 4, and that foreign capital will surely turn up at India's doors, 8.5 per cent average growth for the 12th Plan doesn't seem unrealistic. That's the good news, even if it is no thanks to the Government. The Approach Paper also envisages 4 per cent growth in farm output over the plan period, up from 3.3 per cent for the 11th Plan period. If this can be achieved, food inflation at least should not remain a cause for major worry, provided the measures needed for supply chain management are put in place.

The Prime Minister also confirmed what was reported in this newspaper a few days ago, namely that energy and water will be the crucial constraints and that efficient water management would be as crucial as the efficient management of energy. So the caveats are clear, and as the Deputy Chairman, Mr Montek Singh Ahluwalia, told the media on Friday, higher tariffs seem to be the way to go. Since this means the elimination or reduction of subsidies, some of the “hard decisions” are clear as well. The problem of land acquisition also seems to be weighing on the Commission's mind and the Prime Minister referred to it in his statement as being another critical element in the pursuit of 9 per cent growth. For the rest, the Approach is a much of a muchness with the usual genuflections in the direction of infrastructure and the fiscal deficit — one to go up, the other to go down.

The Prime Minister did not mention, quite naturally, another important issue that will soon demand his attention: the future of the Planning Commission itself. The committee headed by Dr C. Rangarajan is believed to have made some important recommendations in this regard.

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