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Recipe for 10% growth

New Delhi, Dec. 19: Higher spending in education and health along with more savings and investments will help the government achieve the targeted growth rate of 10 per cent for the economy by 2012, the final year of the Eleventh Plan.

However, the US sub-prime crisis may trim exports and capital inflows, Prime Minister Manmohan Singh said here today. He was addressing the 54th meeting of the National Development Council, which approved the Eleventh Plan (2007-2012). The size of the plan will be Rs 36,44,000 crore.

“It is possible that with a correct set of policies and dedicated effort by both the central and state governments, we will not only maintain this momentum of high growth but also be able to raise it to 10 per cent,” he said.

The approach paper to the plan had fixed an average growth rate of 9 per cent over five years and set a target of 10 per cent for the final years.

At the meeting, Singh announced the setting up of an expert group to review statutory clearances to industrial and infrastructure projects.

He also emphasised the importance of reducing the rural-urban divide. Finance minister P. Chidambaram urged state governments to explore the possibility of refunding taxes to exporters to counter the impact of the rising rupee.

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