Bhubaneswar: India can achieve nine per cent growth in 12th five-year plan if scarcity in the key sectors of infrastructure and energy is addressed through big investment, Planning Commission Deputy Chairman Montek Singh Ahluwalia said on Friday.
He said the economic downturn is expected to be over, and inflation brought under control, in about three months, and added, "Nine per cent economic growth target is very much achievable during the 12th plan if these challenges are addressed."
"There is nothing to suggest that 9 per cent GDP growth is not achievable if we do what is necessary. We need to do a lot to raise productivity and remove impediments and constraints," he said while delivering Foundation Day Lecture of aluminium giant NALCO.
Describing infrastructure as the key to spurring the economy, Ahluwalia said both central and state governments need to take concrete steps to strengthen roads, transport and energy sectors which still remain considerably weak.
Stating that infrastructure requires huge funds, he said that substantial investment could be ensured through PPP projects. "India has the second largest number of PPP projects as per a data," he said.
In order to achieve nine per cent growth, India must attain 6.5 per cent growth in total energy, Ahluwalia said, adding that electricity is already scarce and to boost economic growth power demands would rise further.
Voicing concern over losses being incurred by power distribution companies, Ahluwalia said state electricity regulatory commissions must be allowed to function freely.
Referring to petroleum and coal, he said the volume of imports of these materials is bound to increase considerably in order to speed up activities that are required for pushing the economic growth rate.
On GST, Ahluwalia said, "It is tied up in a debate and a little political cooperation is needed to move forward on this front as it would lead to efficiency and growth. Even if one per cent growth takes place it would have a balancing effect."
He also advocated appropriate steps be taken to address the issue of savings.
India has a very good savings capacity but public savings is weakening which should grow by 36 per cent, he added.
Turning to water, Ahluwalia said the challenge of managing water crisis is bigger than handling energy as water is more scarce. Availability of water is fixed but expanding the growth rate requires more of it in areas like power generation and agriculture.
However, technologies exist which can cut water requirement for agriculture by half, he said advocating modification in farming practices with use of modern technologies.
Similarly, industries should find ways and means of economising water. Recycling of used water should also be explored in a serious way, he said.
Growing urbanisation in the country is also a major challenge which requires to be addressed in an effective manner, he said some of urban issues need to be addressed by the centre while most of these have to be managed by states.
In order to address the challenges, India should also see what other countries have been doing.
Though India is poised to see end of the temporary phase of economic slowdown and high inflation towards the end of March, 2012 and even better days ahead, there should be no room for complacency, he said.
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