Prime Minister Manmohan Singh on Tuesday said the economy that has weathered the global crisis would expand at around 8.5% next fiscal and 9% the year after, pushing the GDP growth in the whole of the 11th Five-Year Plan to 8.1%, which is higher than the average growth of 7.8% in the previous Plan. Singh said the government would aim at an average GDP growth of 10% during the 12th Five-Year Plan, helped by a record $1 trillion investment in the infrastructure sector.
Singh asserted that a successful infrastructure development strategy would depend critically on implementation. He said, ?I urge the finance ministry and the Planning Commission to draw a plan of action in achieving this level of investment.?
Addressing a seminar in New Delhi, the PM underscored the need for greater private participation for achieving the infrastructure investment target, a fact also highlighted by finance minister Pranab Mukherjee later, as he said later in the day that ?availability of equity, both domestic and FDI, continue to remain an area of concern? as far as infrastructure investment goes.
In one of the reports by Planning Commission deputy chairman Montek Singh Ahluwalia, he estimated the required infrastructure investment during the 12th Plan at about Rs 40.99 lakh crore to achieve a share of 9.95% as a proportion of GDP.
In his opening remarks to the full Planning Commission meeting on Tuesday for the 11th Plan mid-term appraisal, the Prime Minister cautioned that, ?the global environment is expected to remain difficult in the years that lie ahead and exports are likely to grow more slowly than they did before the crisis.? He added: ?We will need another source of demand to offset slower exports growth and that demand should ideally come from an expansion in investment in infrastructure, both in the rural areas and the economy in general.?
Singh noted that as per the mid-term appraisal, the agricultural growth during the current Plan would be better than in the Tenth Plan, and added that ?there is a good chance that agricultural growth may come close to the 4% target.?
Singh said a growth rate of 10%, though ambitious, was not impossible and would hinge on continual improvement in policy regime and implementation procedures. After growing at over 9% in the three preceding years, India?s economic growth declined to 6.7% last fiscal due to the global financial crisis. The growth this year is estimated at 7.2%.