"Right now the global economy does not look good. At the moment, I feel that 9 per cent (annual economic growth rate) is still feasible but more difficult than it was six months ago," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters here.
The Commission has projected 9 per cent annual average economic growth rate during 2012-17, in the Approach document to 12th Plan, which was approved by country`s apex planning body, National Development Council headed by the Prime Minister in October last year. The panel had also estimated economic growth of 8.2 per cent in the current Plan from earlier envisaged 9 per cent.
Asked about projecting a lower growth in Gross Budgetary Support (GBS) in 12th Plan, he said, "It is complete mistake to think that 9 per cent (economic growth) is going to come by giving more and more GBS. That is not the kind of planning we should do. GBS is the amount of funds allocated by Centre for financing various social sector schemes in the country like rural employment guarantee. "Nine per cent (Economic growth) is going to come if the country`s productive resources are efficiently used," he said adding that most of the investment in the country is done by private sector.
"In the infrastructure (development) strategy, we are relying on Public-Private Partnership and not GBS. If you start relying on GBS then I think you are already lost out," he said. Asked whether trimming of GBS in 12th Plan is because of rising fiscal deficit, he said: "How big the fiscal deficit can be, is a constraint on amount of public resources that you can use." Against the government`s budget estimates of fiscal deficit at 4.6 per cent, the figure is likely to be higher.
Earlier the Commission had asked government ministries and departments to limit the increase in Plan outlay during 2012-13 and subsequent years of the 12th Plan period to 15 per cent. Moreover, the panel also said their proposals should take into account three scenarios under which the increase in annual plan expenditure during the 12th Plan (2012-17) should be envisaged at 5 per cent, 10 per cent or a maximum of 15 per cent.
In the Approach document, the Commission made a strong case for keeping the expenditure in check to bring down fiscal deficit to 3 per cent level by 2016-17, the terminal year of the 12th Plan. It pegged the GBS for 2013-14 and 2014-15 at Rs 5,83,305 crore and Rs 6,71,612 crore, projecting an increase of 15.19 and 15.14 per cent, respectively.