Finance minister P Chidambaram on Monday said that Indian economy would grow close to 9% in 2007-08.
?I am not changing my projections, the growth rate in 2007-08 will be close to 9%,?he told reporters after inaugurating the 1500th branch of Indian Bank. He added that the average growth rate in the last four years has been 8.6%.
For 2008-09, too the Chidambaram is setting a target of 9%. ?With more investments taking place, we can aim to grow at 9% in 2008-09,?he said, adding that this would require ?hard work.?The government also needs to deliver while outlays have to be translated into outcome.
The government has been maintaining that the country?s economic fundamentals are good enough to achieve a 10% growth in the eleventh five year plan on the back of the average 9% annual growth in the last three years of the 10th Plan.
Some of the major plans of the government include increasing total annual investment in infrastructure from 5% of GDP to 9% during the five years and achieving 4% growth in the agriculture sector. The government wants to spend about $490 billion in boosting country?s infrastructure.
It is of the view that the current levels of investments in the infrastructure is good enough to achieve only about 8% growth.
Keeping this in mind the government has increased the gross budgetary support for 2008-09 to be Rs 2,21,772 crore which would again spiral up Rs 2,77,565 crore in the year after. It would further move up to Rs 3,73,882 crore and Rs 4,97,835 crore in the final two years of the Plan period. The total GBS for the 11th Plan is about 125% more than the GBS in the 10th Plan.
The GBS for the current fiscal would be Rs 2,05,100 crore. This would grow to Rs 4,97,835 crore in the terminal year of the 11 th Plan in which the government hopes to clock a GDP growth of 10%. In the last five years, GBS has consistently grown by over 16% and the trend is likely to continue in the current Plan period as well.