By IANS,
New Delhi: India will log double-digit economic expansion in the medium term, spending $1 trillion on infrastructure from 2012-17, Prime Minister Manmohan Singh said Tuesday, even as the plan panel lowered the growth target for the 11th Five Year plan to 8 percent.
Presiding over a meeting of the full Planning Commission here, the prime minister said the past two fiscal years were difficult for the Indian economy due to the sharp global slowdown and lower food output last year due to the failure of monsoon.
“Yet, we have been able to maintain a growth rate of 7 percent during the last two years,” the prime minister said, adding that the target now would be to move towards 10-percent expansion in the medium term.
“But restoration of high growth cannot be taken for granted,” he said, laying emphasis on infrastructure development with much greater participation by the private sector to spruce up the network of roads, ports, airports and energy.
“We can also expect a strong rebound in agricultural production if we can ensure that the various schemes supporting agricultural production, expanding agricultural credit and rural infrastructure are implemented,” he said.
“There is a good chance that agricultural growth will touch the 4 percent target.”
Finance Minister Pranab Mukherjee, Agriculture Minister Sharad Pawar, Road Transport and Highways Minister Kamal Nath, Power Minister Sushil Kumar Shinde and Planning Commission Deputy Chairman Montek Singh Ahluwalia were among those who attended the Planning Commission meeting.
During the meeting, the Planning Commission placed the draft mid-term appraisal before the members, which said the average rate of growth during the 11th Five year plan (2007-12) will be lower at 8.1 percent, against the targeted 9 percent.
“The economy would be well positioned for the transition to a growth rate higher than 9 percent in the 12th Plan period,” added the document, also calling for several course-correction measures in the remaining tenure of the plan.
The appraisal document will now be discussed by the National Development Council (NDC) and fine-tuned, if necessary, before the federal and state governments start acting on its recommendations.
The council is the highest deliberative and decision-making forum on development issues that comprises the prime minister, chief ministers, lieutenant governors and members of the Planning Commission.
It gives a national character to planning, functions as an instrument of cooperative federalism and looks at policies on infrastructure, rural development, investment, fund mobilisation, labour, food security, agriculture, environment and regional balance.
Earlier, addressing a conference, also organised by the Planning Commission, the prime minister promised a renewed focus on infrastructure and said India will grow at 8.5 percent next fiscal, accelerating to 10 percent in the medium term.
According to the prime minister, in the next Five Year Plan (2012-17), India will need to double the investment of $500 billion that will go into infrastructure development in current plan period.
“Preliminary exercises suggest investment in infrastructure will have to expand to $1 trillion in the 12th Five Year Plan. I urge the Finance Ministry and the Planning Commission to draw up a plan of action for achieving this level of investment.”
He emphasised that a successful infrastructure development strategy depended crucially and critically on implementation, and the federal and state governments needed to give top priority to strengthen the capabilities.
The prime minister also outlined some of the programmes on infrastructure currently under development:
– In electricity, the problem of high transmission and distribution losses was being tackled through accelerated power development and reform programme.
– In roads, work was on to strengthen capacity with changes made in policy for greater private participation
– For railroad, there was a focus on dedicated corridors for both freight and passenger trains, apart from metro rail projects being increasingly pursued in many cities
– In aviation, the Delhi and Mumbai airports are undergoing a complete transformation, airports at Hyderabad and Bangalore have already been operationalised, while the upgrade process will start for Kolkata and Chennai.
“While these efforts will have to be primarily in the public sector, there may be merit in bringing in public-private partnership in these areas as well. We need to work on public-private partnership models in these sectors.”