India will need to maintain over 4.5% farm output and 12.4% manufacturing growth during the 12 Plan (2012-17) to achieve the ambitious 10% economic expansion in the five year period.
With adequate focus on agriculture and industrial sectors, the average growth rate in the next Plan can be raised to 10% from 8.1% in the current plan, said a note prepared by the Commission ahead of the meeting of the full Plan panel on April 21.
The meeting to be headed by Prime Minister Manmohan Singh is likely to approve the Approach Paper for the 12th Plan. Among others, the meeting will be attended by Planning Commission members and senior Cabinet ministers including Finance Minister Pranab Mukherjee and Home Minister P Chidambaram.
Although the Commission had pegged the economic growth rate at 9% for the Eleventh Plan (2007-12), it was scaled down to 8.1% in view of the impact of the global financial meltdown on the Indian economy.
The Commission has suggested growth scenario under which 9% growth can be achieved by maintaining 4% agriculture and 9.8% manufacturing growth rates.
At present, India is passing through a critical phase with spiralling inflation and moderating industrial output, particularly manufacturing.
According to the latest data, manufacturing sector has registered a growth of 8.1%, compared to 10.4% in the April-February period of 2010-11. In February, it slowed to 3.5%, compared to 16.1% in the same month last year.
Experts describe India as being in 'catch-22 situation' as taking short term monetary measures like raising key rates would hamper growth and the absence of these initiatives would further fuel inflation.
High prices of vegetables and manufactured items drove the overall inflation in March to 8.98%, way above the RBI's revised (upward) projection of 8%.
The overall inflation measured on the basis of Wholesale Price Index (WPI) was 8.31% in February. The WPI inflation for January was revised upwards to 9.35% from the provisional estimates of 8.23%.
Concerned over high headline inflation, the Commission had raised doubts over clocking the targeted 9% economic growth in the current fiscal.
"We may not hit 9% (economic growth rate in 2011-12), " Planning Commission Deputy Chairman Montek Singh Ahluwalia had said.
Referring to growth prospects in the current fiscal, he said, it may be difficult to achieve 6% farm sector growth expected to be recorded during 2010-11.
"There is no chance for agriculture to grow at 6% this fiscal, it may probably grow at 3%", he said.
