India will need to maintain over 4.5 per cent farm output and 12.4 per cent manufacturing growth during the 12 Plan (2012-17) to achieve the ambitious 10 per cent economic expansion in the five year period. With adequate focus on agriculture and industrial sectors, the average growth rate in the next Plan can be raised to 10 per cent from 8.1 per cent in the current plan, said a note prepared by the Commission ahead of the meeting of the full Plan panel on April 21.
The meeting to be headed by Prime Minister Manmohan Singh is likely to approve the Approach Paper for the 12th Plan. Among others, the meeting will be attended by Planning Commission members and senior Cabinet ministers including Finance Minister Pranab Mukherjee and Home Minister P Chidambaram .
Although the Commission had pegged the economic growth rate at 9 per cent for the Eleventh Plan (2007-12), it was scaled down to 8.1 per cent in view of the impact of the global financial meltdown on the Indian economy.
The Commission has suggested growth scenario under which 9 per cent growth can be achieved by maintaining 4 per cent agriculture and 9.8 per cent manufacturing growth rates.
At present, India is passing through a critical phase with spiralling inflation and moderating industrial output, particularly manufacturing.
According to the latest data, manufacturing sector has registered a growth of 8.1 per cent, compared to 10.4 per cent in the April-February period of 2010-11. In February, it slowed to 3.5 per cent, compared to 16.1 per cent in the same month last year.
Experts describe India as being in 'catch-22 situation' as taking short term monetary measures like raising key rates would hamper growth and the absence of these initiatives would further fuel inflation.
High prices of vegetables and manufactured items drove the overall inflation in March to 8.98 per cent, way above the RBI's revised (upward) projection of 8 per cent.
The overall inflation measured on the basis of Wholesale Price Index (WPI) was 8.31 per cent in February. The WPI inflation for January was revised upwards to 9.35 per cent from the provisional estimates of 8.23 per cent.
Concerned over high headline inflation, the Commission had raised doubts over clocking the targeted 9 per cent economic growth in the current fiscal.
"We may not hit 9 per cent (economic growth rate in 2011-12), " Planning Commission Deputy Chairman Montek Singh Ahluwalia had said.
Referring to growth prospects in the current fiscal, he said, it may be difficult to achieve 6 per cent farm sector growth expected to be recorded during 2010-11.
"There is no chance for agriculture to grow at 6 per cent this fiscal, it may probably grow at 3 per cent", he said.
Source: Economic Times, April 17, 2011
http://economictimes.indiatimes.com/news/economy/indicators/high-farm-manufacturing-output-must-for-10-gdp-in-12th-plan/articleshow/8004954.cms
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