The Union Cabinet on Thursday approved the mid-term appraisal (MTA) of the Eleventh Plan (2007-12) projecting a scale-down in average growth from 9 per cent targeted initially to 8.1 per cent during the five-year period as a consequence of the slowdown in the wake of the global financial crisis.
The MTA, which was endorsed by the full Planning Commission headed by Prime Minister Manmohan Singh at its meeting on March 23, will now be placed before the National Development Council (NDC), the country's highest policy making body, also headed by the Prime Minister, for final approval.
Headed by the Prime Minister, the full Planning Commission comprises key Cabinet ministers, including Finance Minister Pranab Mukherjee and Agriculture and Food Minister Sharad Pawar, Deputy Chairman Montek Singh Ahluwalia and all full-time members of the commission. The NDC, on the other hand, comprises the full Planning Commission along with the chief ministers of all the States.
Briefing the media here on the Cabinet decision, Information and Broadcasting Minister Ambika Soni said: “The Cabinet has approved the proposal of the Planning Commission to put the MTA of the current five-year Plan before the NDC.''
While lowering the growth rate for the Plan period to 8.1 per cent taking in to account of impact of the slowdown on various sectors of the economy, the Planning Commission's MTA projected an overall growth of 8.5 per cent in the current fiscal and a further rise to 9 per cent in 2011-12, the terminal year of the Plan period.
Initially, the Commission had set an average annual growth target of 9 per cent for the XI Plan, starting with a growth of 8.5 per cent in the first year (2007-08) and ending with 10 per cent in the final year (2011-12). While the first year growth was higher at 9 per cent, the tempo in expansion was interrupted in 2008-09 as a fall-out of the global turmoil and the growth rate slipped to 6.7 per cent. It recovered the following year to pose a growth of 7.4 per cent.
In view of the fast recovery, the MTA has noted that the “economy would be well positioned for transition to a growth rate higher than 9 per cent in the XII Plan.” To achieve this, the commission has suggested focus on fiscal consolidation and an investor-supportive economic environment.
