8% growth is out of reach: PM

'Why wait 5 years for plans?'.

Prime Minister Manmohan Singh today said the economy was unlikely to cross the 7 per cent growth mark during the tenth plan period (2002-07), well below the 8.1 per cent growth target set in the Plan document.

Employment generation and agricultural growth were unsatisfactory, he said.

"There are several positive features which are noted but, there are also signs that the economy is not on track to achieve many of the important targets of the Plan and corrective policies are, therefore, urgently needed," Singh said while addressing the second meeting of the full Planning Commission, which discussed the mid-term appraisal of the Tenth Plan.

Calling for a more flexible approach to planning in the Eleventh Plan period (2007-08 to 2011-12), Singh said there was a need to focus on different time horizons while planning for different sectors.

"While the benefits of a five year planning process are apparent, it is not sufficient in a world driven by rapid technological change, leading to rapid changes in consumer demand patterns and production opportunities," he said, adding that most creative discussions in a Budget exercise focused on Plan expenditure.

"If so, is it essential to wait for five year intervals to re-engage in a planning effort or can we do this on an annual basis for certain areas and on a longer basis for others? This is especially relevant as we now present medium term forecasts for the Budget," Singh added.

He also said that the focus of planning needed to be changed to ensure that all aspects of policies were conducive to encouraging the private sector play a role in infrastructure development.

He said the private sector needed to be incentivised to enter into sectors like health and education through public-private partnership models.

In addition, the responsibility for sectoral interventions, was to be increasingly transferred to states while the Centre was to retain flexibility to support targeted programmes aimed at the weaker sections of society.

Calling for high and balanced growth, Singh said: "It is important that as a country, we learn to walk on two legs, one embracing the process of high growth and the other addressing the issue of redistribution and balanced development. The former is essential to generate the resources for the latter."

Singh reiterated the government's commitment to seven priority areas: agriculture, water, education, health, employment, urban renewal and infrastructure.

Suggestions made, regarding the Backward Regions Grant Fund, in the MTA needed to be operationalised soon and further initiatives taken in order to ensure that regional imbalances were bridged.