Senior officials in the Planning Commission said economic growth could be higher than six per cent at 6.5-seven per cent in 2014-15, and over seven to eight per cent in 2015-16. In the last year of the 12th Five Year Plan (2016-17), the growth rate could touch eight per cent, they said.
The 12th Five Year Plan document had projected the economy to grow by 8 per cent a year on an average in the plan period (2012-13 to 2016-17). With the first year of the Plan yielding just five per cent growth rate and even if one takes the 5.3 per cent growth rate projected by the Planning Commission at face value, the next three years would have to grow by close to 10 per cent on an average to yield an average annual growth rate of eight per cent during the Plan period.
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The commission officials said when the economy is down in the first two periods, investors are not as much interested in the average annual growth rate, but how much the economy would grow in, say the last two years. The moot question is when would the investment cycle pick up.
"If you are growing at eight per cent plus in the last two years…they will say 'wow, India is back on track'. Well, everybody who is thinking about India, is not thinking of the record in the 12th Plan. They are thinking …if we get back to 8 per cent plus in the last two years of the Plan, India will comprehensively have established having a 8 per cent plus growth potential," said an official.
Officials countered a query on domestic policy paralysis affecting economic growth, saying, "After all, China is expected to grow at 7.5 per cent this year and they grew at 11.5 per cent in 2009. So, if China has slowed down…why do you think India will not slow down?"
They said if everyone else was growing at the projected rates and India had dipped, then policies were to be blamed. But, this is not the case, they added, as the global economic situation had squeezed demand and affected capital flows.