Planning Commission wants course correction for high growth economy

The Planning Commission has called for course correction in various policy measures concerning social, agriculture and infrastructure sectors in a bid to bring the economy back on high growth trajectory, even as it lowered its growth target for the five years to 2012.

In its mid-term appraisal (MTA) of the Eleventh Five Year Plan (2007-12), the Planning Commission has rolled back the GDP growth target for the period to 8.1 per cent from earlier projected 9 per cent (See: Planning Commission lowers 11th plan growth target to 8 per cent).

''The growth momentum is picking up again, thereby giving us the confidence to achieve higher growth of 9-10 per cent in the Twelfth Plan (2012-17),'' Planning Commission deputy chairman Montek Singh Ahluwalia told reporters after the meeting of the commission.

According to the MTA the path of fiscal correction was of crucial importance for macro-economic credibility and larger private investment. The full Planning Commission cleared the MTA on Tuesday.

The MTA document will now be placed before the cabinet and then to the National Development Council (NDC) for final approval.

''The MTA has not suggested that subsidies should be withdrawn completely. We are of the view that subsidies should not be open ended with possibility of leakage. The best way is control it from exceeding further from the current budgeted levels,'' Ahluwalia said.