Prime Minister Manmohan Singh will discuss the ways to isolate India from the impact of global economic crisis. He is likely to meet the economic and social sector ministers this week even as the country's top advisory body, the Planning Commission, has suggested downgrade of economic growth rate for next five years from 9-9.5 % to 8.5-9 %.
“If we can touch 9% in the 12th plan (starting April next) it will be great,” said a top panel functionary, contending that the final call will be taken at Planning Commission meeting on August 20. “It will be higher than 8.1% GDP growth we will achieve in the 11th plan.”
This April, PM Singh had approved a target range of GDP growth of 9-9.5 %. In the intervening three months a lot has changed. Plan panel deputy chairperson Montek Singh Ahluwalia admitted that the crisis will impact India's projected growth trajectory but said “the country's fiscal position was sound to sustain high growth rate”.
The concerns has prompted the PM to seek comments from finance and commerce and social sector ministries such as rural development and HRD on steps to be taken to minimise the impact.
The plan panel believes that slowing down of the growth rate will crunch availability of resources for the social sector in the 12th plan as the government was committed to maintain fiscal deficit at reasonable level.
“Availability of plan funds may not be high as we are looking at an annual increase of just 1.3% of the GDP in the 12th plan,” an official said. PM Singh, however, said there will be no constraints of funds for health and education sectors in the 12th plan, which will also seek renewed effort for infrastructure development.