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Planning Commission unlikely to cut 12th Five Year Plan growth target

28 Apr 2014 Evaluate

Planning Commission is unlikely to suggest any cut in 8 percent annual average growth target for the 12th Plan despite the fact that Indian economy performed below average in the first two years of this period. Meanwhile, in order to achieve annual average growth of 8 percent in the 12th Plan period, domestic economy will have to grow at over 12 percent in 2015-16 and 2016-17 which is difficult.

Planning Commission's internal meeting to be headed by Prime Minister Manmohan Singh on April 29 would deliberate on the draft mid-term appraisal document for the 12th Plan and may refrain from suggesting any cut in growth target set for 12th Five Year plan. The mid-term review of 12th Plan will be conducted in the end of this year and the new government formed after general elections will bear the onus of revising the growth target. The term of Commission will also expire with the present government, and new government will constitute the new Planning Commission.

Presently, Indian economy is struggling with slowdown and its growth slowed down to a decade low at 4.5 percent in FY13 and 4.6 percent during the first three quarter of FY14. The factors like high interest rate, low investments and slow execution of infrastructure projects have been impacting economy’s growth.  The Central Statistics Office (CSO) expects the Indian economy to grow at 4.9 percent in FY14. Reserve Bank projected Indian economy growth at 5-6 percent during FY15. 

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