Wary plan panel to lower growth projection to 8% | business | Hindustan Times
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Wary plan panel to lower growth projection to 8%

business Updated: Dec 27, 2012 02:34 IST
Chetan Chauhan

The UPA government is gearing for a fiery National Development Council (NDC) meeting where the government will seek approval for its downgraded economic growth target of 8% for 12th plan (2012-17) and the confusing 12th plan document.

NDC is the body of all chief ministers and key Central ministries.

The panel had earlier projected growth of 8.2 % but now, considering changed economic scenario, will pitch for 8%, a target not easy to achieve. "There is lot of uncertainties for 2013," planning commission deputy chairperson Montek Singh Ahluwalia said, adding that the economic scenario is unlikely to improve in near future.

While the growth target has been lowered, the panel has not proportionately reduced the public sector allocation for 12th plan of Rs 43,33,000. The panel, in its document, has spoken of trimming the target in the mid-term appraisal indicating that generating so much money is impossible.


Ahluwalia said that the planning was "all about being optimistic". His colleague Abhijit Sen felt that a correct picture should have been depicted in the plan document. The government generated around 60 % of the 11th plan resource mobilization target.

The plan document also says that job creation in the manufacturing sector fell by around 5 million between 2004 and 2011 and the response to its Public Private Partnership in social sector was poor. The panel has suggested that companies should be allowed to utilize its corporate social responsibility funds in PPP and allow profit companies in education, a proposal opposed by HRD ministry.

The plan also lacks clarity on discontinuation of Centrally Sponsored Schemes (CCS) of less than Rs 300 crore and on poverty estimation methodology. The Cabinet is yet to take a view on CCS, on which the finance ministry has a divergent view, and the Rangarajan Committee on way to measure rural poverty would submit its report only by next June. The committee on measuring urban poverty submitted its report on Wednesday.

The panel would come under criticism for failing to highlight its 11th plan policy failures in the document and the charge of discrimination in providing funds to non-UPA states. The non-UPA states would also raise the issue of rising inequality in income and consumption distribution and abysmally low poverty line of Rs 32 for urban areas and Rs 26 for rural areas.

The panel is also expecting tough questions from the chief ministers on hurriedly implemented direct cash transfer scheme in 43 districts, rigid guidelines for spending Central government funds and special status to Bihar.

Ahluwalia said it would not be possible to grant Bihar special status under present regime as it does not meet the criteria and added that cash transfer will improve overall governance of the schemes.