Prime Minister Manmohan Singh on Tuesday cautioned that return to high economic growth should not be taken for granted, as the global environment is likely to remain difficult in the year ahead.
"Our strengths can help us return to 9 per cent growth trajectory by 2011-12. However, as the mid-term appraisal rightly emphasises, restoration of high growth should not be taken for granted," he said, presiding over the meeting of the full Planning Commission here.
He said exports are likely to grow more slowly than they did before the crisis. India had targeted $200 billion worth of exports in 2008-09, but the economic crisis that swept the world put paid to this hope and the country ended that fiscal year with $185 billion in exports.
This fiscal, it may end with exports worth $160-165 billion. "We will need another source of demand to offset slow exports growth and that demand should ideally come from an expansion in investment in infrastructure, both in rural areas and the economy in general," he said. Earlier in the day, Singh called for investments in infrastructure to double to $1 trillion.
Besides Planning Commission Deputy Chairman Montek Singh Ahluwalia and its members, the full Commission comprises key Cabinet Ministers including Finance Minister Pranab Mukherjee and Food and Agriculture Minister Sharad Pawar.
The meeting reviewed the targets achieved so far under the 11th Five Year Plan (2007-12). In his presentation, Ahluwalia said the average annual growth rate of the 11th Plan would be 8.1 per cent against the target of nine per cent.
The growth in the next Plan period could be 9-10 per cent, he said.
The Prime Minister said that the country can expect a strong rebound in agriculture production, with a normal monsoon this year. Severe contraction in farm production in the third quarter of this fiscal has pulled down economic growth to just six per cent from 7.2 per cent in the second quarter.
Singh said despite being hit by global crisis of exceptional severity, "we were able to maintain a growth rate averaging nearly 7 per cent in the last two years." Indian economic growth declined to 6.7 per cent last fiscal, after expanding by nine per cent in the three previous years, as a result of the global financial crisis.
However, stimulus provided by the government raised the growth estimates to 7.2 per cent this fiscal. The Prime Minister said the mid-term appraisal of the 11th Plan brings out deficiencies in implementation of the schemes and these deficiencies need to be removed.
"Our focus must shift from making demand for more resources to expand schemes to undertaking serious review of their effectiveness in improving the implementation on the ground," Singh said. Home Minister P Chidambaram, Railway Minister Mamata Banerjee and Transport Minister Kamal Nath could not attend the meeting.
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