Growth rate unlikely to slip to 5% this fiscal: Montek

The Planning Commission today said the economic growth is unlikely to slip to 5% in the current fiscal as things are set to improve in the second half of 2012-13.

"I don't think growth would come down to 5% in the current fiscal... The government is taking number of steps which will bring growth up. We would expect to see an improvement," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters here, after a meeting with Finance Minister P Chidambaram.

The 12th Plan (2012-17) draft document, which will be placed before the meeting of Full Planning Commission, which will be chaired by Prime Minister Manmohan Singh on Saturday, has reportedly warned that persistent "policy logjam" could pull down the growth rate to 5%.

The Commission is aiming an average annual growth of 8.2% during the 12th Plan.

India's economic growth in the first quarter (April-June) this fiscal stood at 5.5%. Although it was much lower than 8% in the corresponding period last fiscal, the growth showed improvement on sequential basis. The growth rate in January-March was 5.3%.

Meanwhile, Law Minister Salman Khurshid, who met Chidambaram earlier in the day, indicated that the government would be taking important decisions to boost the economy.

"The government should take far reaching decisions now and that's what all of us expect... This is a time we need to set the economy right. Finance Minister would want some important decisions to be taken," Khurshid said.
India's economic growth had slowed to a nine-year low of 6.5% last financial year and as per the general expectation, economy is unlikely to do much better in the current fiscal.

Industrial output in the April-July period of this fiscal has thus contracted by 0.1%, according to the recent official data. In view of fragile economic recovery, the Plan panel had decided to lower annual average economic growth rate to 8.2% in the 12th Five-Year Plan (2012-17) from 9% as
envisaged earlier.