New Delhi, April 15: Concerned over high headline inflation, Planning Commission today raised doubts over clocking the targeted 9 percent economic growth in the current fiscal.
“We may not hit 9 percent (economic growth rate in 2011-12). 6 percent is the rate of inflation which we should be willing to accept this fiscal,” Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters here.
The government and the Planning Commission had earlier projected a growth rate of 9 percent during 2011-12, up from 8.6 percent in the previous fiscal.
Referring to rise in headline inflation to 8.98 percent in March from 8.31 percent in February, Ahluwalia said, “inflation has been a concern. It has not come under control as much as I had hoped. There is need to use fiscal and monetary policy to get rid of supply constraint wherever they exist.”
Referring to growth prospects in the current fiscal , he said, it may be difficult to achieve 6 per cent farm sector growth expected to be recorded during 2010-11.
“There is no chance for agriculture to grow at 6 percent this fiscal, it may probably grow at 3 percent”, he said.
He pointed out, “Even to stay at 8.6 percent GDP growth this fiscal, industry will have to do much better. Now industry has done about 7.8 percent in 2009-10 (so far till February end)”.
According to the latest data, the index of industrial production for April-February last fiscal stood at 7.8 percent and the factory output dipped to 3.6 percent in the month of February as compared to 3.9 in January.
Exuding confidence of maintaining growth momentum this fiscal, Ahluwalia said, “Between 8.6 to 9 percent (GDP growth this fiscal) there is no big deal. I think the down side of 9 percent is more relevant”, he said adding it will not be “way off” (the 9 percent mark).
-PTI