Prime Minister Manmohan Singh has cautioned that slow growth can impact resources needed to implement inclusive programmes.
He was speaking at the National Development Council meeting on Thursday, where 12th Five Year Plan (2012-2017) aiming an average "more inclusive" economic growth rate of 8% was approved.
The average economic growth in the 11th Plan was 7.9 %.
The council, chaired by the PM and having chief ministers as members, had divergent views on lowering the growth target to 8%.
Some CM such as Gujarat's Narendra Modi felt lowering the growth rate will lead to "pessimism" whereas others described the move as "realistic".
The PM acknowledged that achieving the 8% growth target would not be easy with the growth in the first year of the Plan to be less than 6% and current global economic situation remaining difficult.
"The global slowdown, combined with some domestic constraints, has meant our growth has also slowed down," he said, asking the chief ministers to provide inputs to reverse the slowdown.
Exhorting the states to aim for higher growth, Singh said, rapid growth leads to inclusiveness because it provides greater access to income and employment whereas slower rate could result in cut in welfare programmes or high fiscal deficit.
"We need 20 years of rapid growth to bring it to middle-income level," he said.
He highlighted that the immediate area of concern was implementing big-ticket infrastructure projects, especially in power sector, which are stuck because of delays in getting clearances and fuel supply.
The PM had also asked the Planning Commission to seek views of CMs on fuel supply problems for power plants and submit a report within three weeks.
At probably the last NDC before the next 2014 polls, the PM outlined the achievements of his government, including two percentage point annual reduction in poverty since 2004, when UPA came to power, which was 2.5 times faster than the rate of decline between 1993-94 and 2004-05.