‘Barring the changes in growth numbers, work on the Plan document is on track’
In the wake of a “sharp deterioration” in the global economic environment and its impact on India, a scale-down in the country’s growth projection is now official, almost. Planning Commission Deputy Chairman Montek Singh Ahluwalia, on Friday, conceded that achieving a GDP (gross domestic product) expansion of 8 per cent in the next five years through the XII Plan would require a “major effort” and would not come about as a “God given right”.
Interacting with journalists on the sidelines of a first-time conference with state planning boards here, Mr. Ahluwalia pointed out that achieving an average GDP expansion of 9 per cent during 2012-17 as enunciated in the XII Plan Approach Paper was out of question and a scale-down of the ambitious growth target for the five-year period would be internally discussed in the Planning Commission.
“It is not possible to think of an average of 9 per cent. I think somewhere between 8 per cent and 8.5 per cent is feasible...When I say feasible, that will require [a] major effort. If you don’t do that, there is not [a] God given right to grow at 8 per cent,” he said.
Last year, while vetting the Approach Paper for finalising targets for the Plan period, the Planning Commission had obtained approval for pegging the annual average economic growth target at 9 per cent from the National Development Council (NDC), the country’s highest decision-making body headed by the Prime Minister and with all Chief Ministers and Cabinet Ministers on board.
Mr. Ahluwalia noted that following the changes in the economic scenario, both globally and at home, once the new growth numbers are discussed internally, they would be placed before the NDC for inclusion in the Plan document.
The NDC, presided over by Prime Minister Manmohan Singh, is expected to meet in September.
Barring the changes in growth numbers, work on the Plan document is on track. “We have targeted the NDC meeting in September. I think we are on track,” Mr. Ahluwalia said while pointing out that in the run-up to the NDC meeting, a meeting of the full Planning Commission chaired by Dr. Singh was likely to be convened next month.
As for the expected GDP growth during the current fiscal year, Mr. Ahluwalia said: “Given that the world economy deteriorated very sharply over the last year, the growth rate in the first of year of the Plan (2012-13) is likely to be 6.5-7 per cent.”
At the day-long conference, Principal Advisor Pronab Sen made a presentation before the state planning board chiefs to explain why it would be “difficult to grow faster than 8 per cent, without being more efficient in our use of resources”. For one, the XII Plan has begun at a time when the economic conditions are not favourable and, therefore, a new strategy would have to be put in place to achieve higher growth. Such a strategy would involve optimal utilisation of natural resources and improvement in credit flow to small units, agriculture and the infrastructure sector.
However, if the Plan target is to achieve a growth rate of 9 per cent, the country would need to expand exports by 20 per cent each year for the five-year period and increase its engagement with the world to lure more foreign investments, Dr. Sen said.
Another scenario would be to opt for a GDP expansion of 8.5 per cent wherein the country’s economy would have to maintain a farm growth rate of 4 per cent along with manufacturing growth at the rate of 10.5 per cent.
This apart, it would have to generate 25 million new work opportunities in the non-farm sector and raise the green cover by one million hectare each year.
Alongside, the number of people below the poverty line would also have to be reduced by 10 per cent during the five-year period, or by an average 2 per cent each year, if a GDP growth of 8.5 per cent is to be achieved, he said.
Keywords: Indian economy, growth target, Planning Commission, Montek Singh Ahluwalia, National Development Council
India's growth has always been inclusive that is growth is based on expansion of local industries,services and commerce. So what Mr Monteck is saying is not correct. China's growth as well as South Korea, etc has been mostly based on external factors and the slowing in the world economy will have an effect on their growth story. The main reason for India's lack of growth now is the inability of Mr Monmohan Singh, the under acheiver prime minister of India and his team of incompetent ministers. The other is the nexus of evil between corrupt politicians and industrialists specially those having bases abroad specially in the UK creators of black money. Till such time as corruption, impotency, weak government, out dated communist ideology are prevalent in India there will not be any growth.
15 august was the day of independence.Let us make 15 august once more
the day of independence.This is arequest to all indians who are
complaining or have complained/suffered because of corruption:Let us
hold a protest on this day against corruption! This protest will be so
that the government can pass the proper Jan Lokpal bill,not the bill
that they made.How long will we depend on Anna Hazare.That guy has
done so much against his health, and we are not doing anything.Why is
it that only when he does something, we raise our voices.Let us raise
our voices and do so that great people like Anna Hazare can be proud and
say that even if we can not take back all their suffering,we can at
least go to a better future.Let us please stop complaining only and
actually do something.If we don't raise our voices now, when will we be
free of this damn slavery.Let us on independence day protest in front
of all CM office and ask for Jan Lokpal bill.Spread the message.Jai hind
all indians (muslims, hindu all religions)
Wake up Mr.Singh, The whole world is looking for India for growth and we
are saying that the world needs to grow for us to grow. Sir, wake up, liberalize the economy from the clutches of babus and bureaucratic
clutches we will grow. Don't worry and just liberalism of the economy we
the citizens will grow the country.
It would seem that God has given to the Manmohans and Monteks of this world the right to decide whether our children should go to bed on empty stomach or not. If the economic growth which they aim at does not feed the children, so be it. Please don't bring the God into the matter, says Montek. All right, Sir, we see your point!
DO NOT WASTE TIME ON 8 or 9% or PLATITUDES.Remember, the minister, the MP, MLA the doctor or the beggar in India is someone's family.
1. ELECT Honest MP, MINISTERS & PRESIDENTS.(not necessarily your brother, sister or uncle - Ha, Ha)
2. Get the contractor to perform - build roads, houses and facilities. (do not select the contractor who is necessarily your brother, sister or uncle but a performer one who does his job).
3. Tell Montek and people like him to get off their high horse and learn that poor people are created by people of his attitude. How does one live say INR 50/- per day with a family of four. Tell MPs to try it for a week-see how far they get.
4.Cut your coat according to the cloth you have.
5. Tell newspaper reporters to report the news and not their opinion.
TRY IT AND SEE WHAT HAPPENS? ALL THE BEST.
we had already seen 8% and 9% GDP'S. which were unable to make india to developed country and will not be in future, common man don't know what your GDP means, when the imports costs increases because of dollar rise,why can't we search for alternate source to reduce the imports such as increase the bio-diesel production to reduce the petroleum imports, use solar energy effectively in rain fed areas to reduce the power shortage for the industries, implement RTE properly for every citizen to study, search for alternate methods to achieve 4% growth in agriculture if monsoon fails where more than 60% of labours dependent on agriculture sector.
Dr Manmohan Singh must first exhibit his own "animal spirit" for increasing GDP in the country by replacing Mr Montek Singh Ahluwalia with a responsible team grounded to Indian reality, with native thinking, innovative ideas, possessing proven positive problem solving skills to a uniquely Indian mindset workforce.
Indians by nature are capable of producing best results but only with the right kind of persons at the helm of affairs. But this gaffe Mr. Montek Singh has shown that he is not the man for the job and certainly not capable of exhibiting "animal spirit" except in his own lavish spending on himself and his tours and his toilets!!! .
Replacing Mr. Montek Singh from Planning Commission will send a positive signal to both domestic and foreign markets and our very capable entrepreneurs - both in Agriculture and other industries - will rise to the occasion once they are assured of a level playing field and a more coherant person as the helm of planning.
hmmmm.. he started again on economic growth..
Montek Singh Ahluwalia is not only heading the Planning Commission of
India but rather he is heading the Planning Commission of Govt. of UPA
and not even Govt of India. Should a Deputy Chairman of Planning
Commission of India mention the name of UPA Government in his
discourse? He had made it his habit of hoarding the achievement of UPA
Govt. It had never been such that the Planning Commission of India
have been so much deviated from it core business and involved in so
much in Party politics and controversies.
Still there is time for the Planning Commission (Montek Singh
Ahluwalia) to de-link itself from politics and start focusing on its
core business of planning about the economy of the country and start
delivering as per the demand of the time.
Indian economy is functioning within the domains of a global external environment. India can’t fully insulate itself from the pulls and pressures of its external environment. Of course, climate is another major parameter which decides the growth trajectory of Indian economy. This is not within anybody’s control.
So when we are talking about GDP projections, there are infinite numbers of imponderables. No policy maker has any magic wand in his hand to control all these uncertainties and probabilities to achieve any figures.
When MSA is talking about anticipated GDP figures, he is only making some projections based on some calculated probabilities. There are infinite numbers of conditions attached, like provided this is much rain fall is achieved etc., which are always understood. Targets achieve only in case the conditions met. While understanding the rules of social sciences, better we have these understanding in our mind.
Shri Monteksinh,
We are fed up with your 8%/9% growth gana. Pl pay attention to reduce
price rise and inflation or leave the job.
Dear Mr. Ahluwalia,
It is indeed sad that you claim that growth is no "god given right". For the past 3 years, inflation has been the bane of the Indian economy.
We have heard statements from your office, that of the finance minister and the prime minister that inflation would be controlled by various timelines, December 2010, March 2012, and now October 2012. The reality is that it continues to be at high levels. At the same time we were told that the government was prioritizing high growth. It now seems that you have surrendered this ideal.
Thus, by the time you vacate your office, we will continue to suffer low growth and high inflation. All this because there is no 'magic wand'.
One sincerely prays that in case there is no magic wand, and you are powerless to do anything to overcome the global downturn which you blame for the low growth, that you kindly surrender your post in favour of someone who can do something about it, or can at least try.
MSA , having ruined the economy of the country being a tail of MMS,
should at least stop giving sermons. He has enjoyed power and position
at the favour of PM and converted the mass into poor category
This STATEMENT FROM MONTEK SINGH HAS CHALLENGED THE RELEVANCE OF planning commission.There is no demand of such commissions in India..There is no much difference in the numbers(1 or 0.5)...PC should actually focus on how the growth rate can be achieved,not only passing time in recommending manipulation of targets every year..no ACCURATE TARGET HAS EVER BEEN MADE IN THE HISTORY OF 5YP..
all his sermons and blah,blah will see that his party will nominate him
for vice-president. same happened in case of pranab, as he himself
started wondering whats ''ECONOMICS'' and GDP etc etc. poor people ,
long tough days forever looming them till PM changes. unfortunately the
opposition camp too not in good shape. lets pray to god.
'8 % growth not God given right’! Well said Mr. Ahluwalia. during last few years mainstream media were proclaiming India has arrived in economic big league and the country is almost achieved 'developed' status now that 8% - 9% growth rate will be there for the foreseeable future! As if it is a self-fulfilling prophesy without having the to make the painful sacrifices and adjustments needed to sustain a high growth rate. India is going back to the 'Hindu' rate of growth which is the norm for the country absent the economic reform measures.
"We believe India has the potential to grow at rates between 8 or 9 per cent for the next twenty years and to do so in an inclusive manner," Ahluwalia said, addressing a high level debate on 'State of the World Economy and Finance in 2012' at the United Nations General Assembly in United Nations on Thursday 17 May 2012...
What type of planning commission chairman, on one hand you give the advice to NRI attending the pravasi bharath diwas/day, to invest where you get a better deal and you say 9% growth is not god given right, everything requires an effort from every responsible individual connected with administration to make it convenient for every one nri to fii so that one is on the track to 9% growth not giving a statement it is not a god given right. one at the helm should foresee such type of situation, when you were making that statement the situation was no different
It will be there if Manmohan Singh and Montek Singh will not be in Planning Commission.
Planning Commission should not foretell because even astrology gives the basis for foresaying. Montek Singh should better give assumptions being made and policy initiatives needed for this 8% or 8.5%. If it goes you blame the agriculture for which God only can give suitable rainfall and you would not contribute or facilitate the farmer to contribute to GDP. You only think of the concessions to be given industry for enhancing the growth of GDP. After giving all of them, then you blame God for less rain and consequential reduction of food output for lower GDP and corporate sector can still enjoy all the benefits doled out without its marginal contribution to GDP. It is high time that Planning gave to the public the ratio of conessions or duty waivers to the contribution to GDP either Corporate or agriculture or even service sector. Then we can easily see whose favour the Government is working.
Mr.Montek is right in that 9 % is not possible for the next five years because he as the
planning chief had goofed up big time. Planning does not mean producing a bumper crop
and letting it rot in the open, nor does it mean allow hundreds of cars on the road without
proper roads to match the increase, nor that you do nothing towards infrastructural
development when the country is moving at a fast pace or that you do not increase in
productivity of essential basic facilities like power and water when you give licenses to more
and more industries. Likewise planning does not mean constructing toilets so expensive that
even the queen of England cannot afford, nor making hundreds of fruitless trips abroad
costing the exchequer a huge sum of money, nor does it mean that the corrupt are not
caught and the black money lying in Swiss banks are not brought back for the good of the
country. Is this what you call planning, Mr. Montek? If so, the country can I'll afford such a
luxury.
This growth they talk about is all about increasing the income of the 48 billionaires
that run this country, their stock market hoardings and juggling, with their puppet
governments, letting them off the hook on taxes and giving them huge subsidies.
For the rest of us mainstream commonfolk all this talk of GROWTH only entails a
constant RISE in basic amenities, services and commodities. We need to see an
IMPROVEMENT in living conditions in our small towns and villages and an end to
farmer suicides and impoverishment of the marginals. Only then can we raise our
heads and be proud to be Indians. Everyone knows by now that the trickle down
theory DOES NOT WORK. We don't need foreign investments. We need to develop our
own industries and create job opportunities with small scale industries such as
weaving, manufacturing eco-friendly building materials, inculcating a work ethic
that brings home the dignity of labor, encouraging carpenters, construction workers,
and other service staff.
We need bold, encouraging words during times like these. Not such words
from an important person like Montek. He will be better advised to
take some lessons from people like Kapil Dev (who achieved the
impossible World Cup in 1983 defending a low score) and Winston
Churchill (who inspired the British with his bold words and acts during
the WW II).
Managing India is not a joke but the toughest task before all the political parties. Dr.Manmohan, Montek Ahluwalia & Subbarao are endeavouring their best but couldn't perform satisfactorily due to several constraints called democracy. If we want to have an egalitarian peaceful society, hard decisions are indispensable. It appears Congress rule may continue after 2014 but old faces must go in national interest giving way to youth and youth alone to pave the way for a better future.
That we knew Mr.Montek! You don't have to tell us what we knew. Tell us
what are the measures taken to avoid further slipping.
Wait till we get other bombshells; telling us of pathetic situation & condition of
country; brought by the present ruling party.
GDP is just one of the 27 main indicators that Planning Commission is supposed to deal with first hand. But Mr Ahluwalia always seems to be speaking about this single indicator.
12th plan is about Health (UHC), Education (RTE), Sanitation, urbanization, water & energy security. 9% or not doesn't matter to common citizens. Please deliver what you promised. We do not expect you to give us double digits of GDP - but would like to see that all children are crossing 8th digit (8th std).
I liked the statement "Last year, the Planning Commission got the approval for the 9 per cent annual average economic growth target under the Approach document for the 12th.....".
It is as if the country of 1.2 billion will need an 'approval' to grow ;)
The world is going to grow, population is increasing, many more people are coming out of poverty and consuming more than earlier etc etc. So overall the world will grow.Only the growth engines will shift from current developed countries to developing economies like India. So I don't understand why is planning commission citing gloom in developed economy as the 'reason' for India's relatively slower growth in coming years?
What happened to double digit Growth Rate ?
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