India’s growth work in progress, says PM

Tags: News
With economic growth slipping below 6 per cent in last two years and unlikely to rise substantially this year, India risks falling far short of the eight per cent growth target in the 12th five-year plan.

Planning commission deputy chairman Montek Singh Ahluwalia on Wednesday admitted that growth had been below target, but said any revision of the 8 per cent growth target for the 2012-17 period would be taken up by the new planning commission.

“We indicated what has happened (to the economy) in the first few years. Growth has been below target. We have taken a number of steps to rejuvenate the economy this year,” Ahluwalia said.

He said everybody expects the economy to do better this year but it would depend on the policies pursued by the new government.

India is targeting eight per cent average annual growth during the 12th plan period that runs till 2017. In the first two years, the economy expanded 4.5 per cent in 2012-13 and 4.9 per cent in 2013-14. Growth projections for this financial year stand at 5.5 per cent. Even if growth picks up to 7 or 8 per cent in the subsequent two years, it would be difficult to push the five-yearly average above 6 per cent.

A mid-term appraisal of the situation is due and will likely be done by the new planning commission around October. The plan panel gets shuffled with every new government.

After the last meeting of the full planning commission chaired by outgoing prime minister Manmohan Singh, Ahluwalia on Wednesday said he would soon ready an assessment of the economy by collating inputs provided by the commission members and send it to the prime minister.

Ahluwalia said his assessment might indicate some critical policy actions required to be taken by the new government to boost sagging growth and that he would leave a copy for his successor.

He refused to share his policy prescriptions for the new government. “I will be giving my views and whosoever is in power post-election can look at it.”

In his farewell speech to the commission, the prime minister called India’s growth story a ‘work in progress’. “India’s development story is a work in progress... But there is a lot of distance that is still to be covered,” he said.

He wanted the plan panel to reflect on what role it should play in a new world, “where the economy is increasingly open, liberalised and globalised” and to ponder if it was still using tools and approaches that were designed for a different era.

Ahluwalia retorted, saying, “To say we are simply doing the same thing is not correct. We have introduced new tools and the commission has responded quickly to changing situations in the economy in the recent years.”

He said the commission was now doing several things that were never done before and was working differently from the past in 17 areas. “Whether it has made a difference is for the people to judge.”

Ahluwalia said the commission has begun the exercise for mid-term appraisal in January, but it can be finalised only after the full budget is presented to Parliament by the new government in July. He hoped the mid-term appraisal is not “interrupted or delayed” because of the elections.

The PM said there was a strong case for restructuring centrally-sponsored chemes to eliminate or minimise central government’s role in micro-managing them. The state governments have long been asking the centre to let them manage those.

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