GDP unlikely to top 7% in Tenth Plan: PM

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New Delhi, April 5: Prime Minister Manmohan Singh on Tuesday noted the economy was not on the right track to achieve many of the Tenth Plan (2002-07) milestones and said the average growth rate for the five-year period was unlikely to cross the 7% mark. The growth target for the Plan period is 8.1%.

Addressing the meeting of the full Planning Commission which approved the mid-term appraisal report of the Tenth Plan on Tuesday, the PM said there was a need for a substantial hike in private investment to step up the growth rate and generate enough resources for meeting the government’s commitments in social sectors and infrastructure. “The government will have to incentivise the private sector to enter unfamiliar areas through well designed public-private partnership models,” Dr Singh said.

Elaborating on the PM’s statement, Planning Commission deputy chairman Montek Singh Ahluwalia said public-private partnerships have to be designed to meet the needs of the general public while ensuring enough incentives for the private sector to come in.

At a media briefing after the meeting, Mr Ahluwalia said the incentives need not necessarily be monetary as a conducive policy environment can also play an important role in attracting private investments.

The PM also mooted the idea of going in for annual planning exercise as rapid changes in consumer demand patterns and production opportunities required constant monitoring of priorities and targets. He said now that the finance ministry had started presenting medium-term forecasts for the budget, the Planning Commission need not wait for five year intervals to re-engage in planning effort.

Mr Ahluwalia said it was time for closer cooperation between the Planning Commission and the finance ministry. “If we get advance warning on what public expenditure in the next two years is going to be like, we can frame our plans accordingly. We have to do some more thinking on how to be more flexible,” he said.

Commenting on the PM’s observation that the growth rate of agriculture had dipped to 1.5% in the first three years of the Plan against the Tenth Plan target of taking it above 4%, Mr Ahluwalia said more investment was needed in a number of areas like irrigation and soil conservation. “The Planning Commission will work on a joint paper with the agriculture ministry on the longer term agenda of bringing dynamism back to agriculture,” he said.