Plan panel cuts GDP growth target to 8.2% for 12th Plan

In view of fragile economic recovery, Plan panel has decided to lower annual average economic growth rate to 8.2 percent in the 12th Five Year Plan (2012-17) from 9 percent envisaged earlier.

“The panel will propose the annual economic growth rate target of 8.2 percent for the 12th Plan. The issue will come up for discussion at the meeting of the Full Planning Commission, to be presided over by the Prime Minister, on September 15,” a source privy to the development said.

As per the proposal, the Commission would aim to achieve Gross Domestic Product (GDP) growth rate of 9 percent in the terminal year (2016-17) of the 12th Plan. Once, the full Planning Commission approves the growth target, it would be vetted by the Union Cabinet and then it would be placed before the country’s apex decision making body National Development Council (NDC) for final approval.

More from Economy

Inflation likely to be a big focus area for budget 2024, say sources Explained: Will the Bank of Japan break tradition and raise interest rates?

[caption id=“attachment_446334” align=“alignleft” width=“380”]  Reuters[/caption]

The NDC is headed by the Prime Minister with all chief ministers and union cabinet ministers on board. It is the final authority to finalise the five-year policy document. In Approach paper to the 12th Plan, approved last year by the NDC, the Commission had envisaged 9 percent annual average growth rate during the five-year period. The target is now being lowered in view of the global problems.

Showing persistent sluggishness, India’s economy grew by 5.5 percent in the April-June quarter, mainly on account of poor performance of manufacturing, mining and farm sectors. The gross domestic product (GDP) had expanded by 8 percent in the April-June quarter of 2011-12.

Besides, the economic growth in the January-March quarter last fiscal was at nine-year low of 5.3 percent. The economic growth rate in 2011-12, the terminal year of 11th Plan, slipped to nine-year low of 6.5 percent.

During the 11th Plan, the average annual economic growth rate has been estimated at around 8 percent as against the target of 9 percent.

PTI