Future growth prospects depend on new government's policies: Planning Commission

Planning Commission Deputy Chairman Montek Singh Ahluwalia on Wednesday said growth prospects of the Indian economy will depend on the policies of the new government to be formed next month.

"The economy can move up, depending upon the policies you follow. In the current (financial) year 2014-15 everybody expects that the Indian economy will get better, but that depends on the policies the new government follows," he told reporters in Delhi after a meeting of the Planning Commission's full-time members with Prime Minister Manmohan Singh.

As regard the revision of annual average growth target of 8 per cent for the 12th Five Year Plan (2012-17), he said that the decision will be taken by the new Planning Commission which would be constituted after the Lok Sabha elections.

The growth has not been very robust in the first two financial years of the 12th Plan. In 2012-13, Indian economy grew at 4.5 per cent and the Central Statistics Office has pegged it at 4.9 per cent for the fiscal year 2013-14 that ended on March 31.

Some agencies have projected economic growth rate of 5.5 per cent for the current fiscal year. Thus, experts feel that 8 per cent average growth rate is not feasible in 12th Plan.

According to Mr Ahluwalia, the Planning Commission has already started the work on mid-term appraisal (MTA) of the 12th Plan so that the newly-formed Commission can take it forward. The Planning Commission is expected to come out with MTA by October.

He also informed that he will compile detailed notes of the members of the Commission on their assessment about the different sectors of economy and submit that to the Prime Minister's Office by May 7.

Besides Mr Ahluwalia, other members are: B K Chaturvedi, Saumitra Chaudhuri, Syeda Hameed, Narendra Jadhav, Abhijit Sen, Mihir Shah, K Kasturirangan and Arun Maira.

Minister of State for Planning Rajeev Shukla also attended the meeting.

The term of the members of the Planning Commission is co-terminus with that of the Prime Minister and they would be submitting their resignations once the new government is formed. During the meeting with the Prime Minister, the members made brief presentations on the progress of different sectors of the economy and the efficacy of the development policies. It was highlighted that tourists from the 180 countries will be provided facility of visa on arrival by October this year.

However, it was suggested that Home Ministry would have to accelerate the process.

It was also pointed out that easing tourist visa regime would result in doubling the revenue from tourism sector. Besides, it was also suggested that the social media can be used for creating global perception about India's tourism sector.

About the Public Finance Management System, the Prime Minister was informed that it would be functional in the entire country by 2016. Once it is operational across the country, it would be the largest such system in the world. It was stressed that central projects should be rooted through this system.

One of the members, a source said, underlined the need for reviewing the price of kerosene and cooking gas (LPG). However, he expressed satisfaction that good work has been done on the gas pricing issue.

It was suggested that government should carefully watch the geopolitical situation following Ukraine crisis.

Commenting on the slow recovery, one of the members stated that economic growth has no major signs of recovery.

However, government was complemented for energising rural India as 80 per cent of the villages have access to power at present compared to 54.9 per cent in 2004-05. India has added 38,500 MW of power generation capacity in the 12th Five Year Plan period so far.

One of the members stated that the quality of school education continues to be a concern despite the "right to education" in the country. It was also stated that the Rashtriya Uchchatar Shiksha Abhiyan (RUSA) for improving state's existing higher education infrastructure, needs to be reviewed.

A member also stressed upon the need to review the prevailing labour laws in the country.

About the agriculture sector, it was stated that when the NDA relinquished charge, the farm sector was growing at 2.2 per cent whereas it was improved to 3.1 per cent in UPA-I regime.

At present, farm sector growth rate stands at 4.1 per cent the 12th Plan period so far.

The member also pointed out that despite growth in the farm sector, there was a fall in absolute number of agricultural labour in the country during 2004 to 2012. It was highlighted that though farm input cost is rising, rural wages are also going up because of high world fuel and fertiliser prices.

During the meeting, another member also stressed on the need to review the Backward Region Grant Fund (BRGF) programme of the government.