27.4.11

12th Plan

The Planning Commission is likely to set a realistic average growth target of 9% for the 12th plan, despite some early enthusiasm that made its chairman, prime minister Manmohan Singh, suggest a target of 10% for the five-year period beginning April 2012. The commission could stick to a 9-9.5% growth target instead of 10% due to continuing global uncertainties, spiraling energy prices and persistently high inflation. The commission had set 9% growth target for the 11th plan also, but scaled it down to 8.2% in the wake of a global economic downturn that slowed growth from 9.3% in 2007-08 to 6.8% and 8% in the next two years. The commission will brief the prime minister and other ministerial members on the approach to the 12th Plan. The approach paper will incorporate the suggestions of the prime minister and is expected to be ready by the end of next month. Economists endorsed the Plan Panel’s decision to set a moderate growth target for the 12th Plan. The government needs to address the infrastructure deficit in the next five years to achieve a sustained 9-9.5% growth, suggested many economists. Ahluwalia expressed optimism on achieving the scaleddown target of 8.2% for the 11th Plan period ending March next year. Despite having missed the initial target we will achieve a robust growth of 8.2%. The inclusive growth agenda of the 11th Plan has been somewhat successful as available data shows that poverty has gone down during the period. Using the Suresh Tendulkar method for calculating poverty, levels of poverty fell from 37% in 2004-05 to 32% in 2009-10. The poverty ratio for 2009-10 has been estimated by Planning Commission member Abhijit Sen and will be used by the commission while drafting the 12th plan document.

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