New Delhi: Concerned over high headline inflation, Planning Commission on Friday raised doubts over clocking the targeted 9% economic growth in the current fiscal.
“We may not hit 9% (economic growth rate in 2011-12). 6% is the rate of inflation which we should be willing to accept this fiscal,” Planning Commission deputy chairman Montek Singh Ahluwalia said in the Indian capital.
The government and the Planning Commission had earlier projected a growth rate of 9% during 2011-12, up from 8.6% in the previous fiscal.
Referring to rise in headline inflation to 8.98% in March from 8.31% in February 2011, 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% 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.
He pointed out, “Even to stay at 8.6% GDP growth this fiscal, industry will have to do much better. Now industry has done about 7.8% 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% and the factory output dipped to 3.6% 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% (GDP growth this fiscal) there is no big deal. I think the down side of 9% is more relevant”, he said adding it will not be “way off” (the 9% mark).