Prime Minister Manmohan Singh with deputy chairman of Planning Commission Montek Singh Ahluwalia in New Delhi on Thursday. (PTI)
New Delhi, April 21: Prime Minister Manmohan Singh today said the government hoped to achieve a 9-9.5 per cent annual economic growth in 2012-2017 with a focus on water, health, education, infrastructure and revamping government programmes.
The Planning Commission should focus on policy and governance reforms while working towards a growth target of 9 to 9.5 per cent for the 12th Plan, Singh said at the full meeting of the Planning Commission to discuss the objectives of the 12th Plan.
He said the economy was expected to grow at an average 8.2 per cent in the current five-year period, which ends in 2011-12.
This is short of the 9 per cent target, but it is a commendable achievement for a plan period which saw a severe drought as well as a global economic slowdown, he said.
Analysts said the government must address structural constraints in infrastructure and skill development, promote labour reforms and display fiscal prudence.
Montek Singh Ahluwalia, deputy chairman of the Planning Commission, said: Uncertainty in the international economic environment and a spike in global commodity prices could lead to higher interest rates and put pressure on the countrys economic growth and add to the inflationary pressure in the economy.
He said, For the economy to grow at least 9 per cent annually in the next plan, the headline (or general) inflation should be around 5 per cent.
Inflation has neared 9 per cent in March, breaching the 8 per cent projection of the Reserve Bank of India.
Goldman Sachs in a research paper has slashed its GDP forecast for fiscal 2011-12 to 7.8 per cent from 8.7 per cent because of the anticipated effects of an interest-rate hike by the Reserve Bank of India to contain inflation.
It expects the annual inflation during the fiscal to be 7.5 per cent, up from its earlier projection of 6.7 per cent, which can worry policy makers.
A critical issue in any Plan is availability of resources... we do know that resources will be a constraint. This underlines the need to focus more on efficiency of resource use, and also supplement public resources with private investment, wherever feasible, the Prime Minister said.
The 12th Plan objective must be faster, more inclusive and also sustainable growth ... We need to identify the critical areas where existing policies and programmes are not delivering results and should, therefore, be strengthened or even restructured, Singh said.
The country, he said, needs to tackle new challenges which call for new initiatives.