awareness in the public about the need to limit energy subsidies.
Energy experts, Singh said, were unanimous that the country cannot expect to achieve rapid, inclusive and sustainable growth if it did not undertake a phased adjustment in energy prices to bring them in line with world prices.
He further said failure to contain subsidy would mean either cutting plan expenditure in other sectors or exceeding the fiscal deficit target.
Describing the current economic situation as "difficult", the Prime Minister said the first priority of the government would be to reverse slowing growth rate.
"The continuing crisis in the global economy has reduced growth everywhere... Our first priority must be to reverse the slowdown. We cannot change the global economy, but we can do something about the domestic constraints which have contributed to downturn," Singh added.
India's economic growth has declined to a nine-year low of 6.5 per cent in 2011-12. For the current fiscal, it is estimated at 5.7-5.9 per cent, which would be the lowest growth in the last decade.
Terming the scaling down of growth for 12th Plan to 8 per cent as a "reasonable modification", Singh said, "achieving an average of 8 per cent growth following less than 6 per cent in the first year is still an ambitious target... The high growth scenario will definitely not materialise if we follow 'a business as usual' policy."
Earlier, Planning Commission Deputy Chairman Montek Singh Ahluwalia said that in view of the domestic and global developments, the growth rate "associated with scenario one (most optimistic outlook) could be scaled down to 8 per cent".
The Prime Minister emphasised that both the Centre and the states should work towards increasing resources to finance programmes of inclusiveness.
Referring to implementation of the Goods and Services Tax (GST) regime, Singh said there was a need to increase the tax ratio as a percent of GDP through combination of tax reforms and better tax administration.
"Early implementation of the GST is critical in this context. I hope we will have the co-operation of the States to introduce the GST as quickly as possible," he said.
Singh said growth rate of many states have improved in the recent years. "The average growth rate of the five poorest states exceeds the national average for the first time in any Plan. I think we may be reaching the stage when the term BIMARU states can be relegated to