Infra targets need to be met for resurgence in growth

UR Associates has come out with its report on infra space. The GDP growth rate achieved in the 10th Plan was at 7.6% and in the 11th Plan it was 7.9%.

The GDP growth rate achieved in the 10th Plan was at 7.6% and in the 11th Plan it was 7.9%; less than the targeted growth rate of 9%. As the Indian economy has slowed down with growth decelerating to 6.5% in 2011-12 and only 5.5% in the first quarter of 2012-13, the Planning Commission has now targeted a somewhat realistic assumption and expects the growth rate to be at 8.2% (from earlier estimated at 9%) over the 12th Plan Period. The main reason why actual growth rate in each Plan period was less than the targeted growth rate was the failure to achieve physical targets.

Achievements of targets in 11th Plan

Sector	XIth Plan
	Target	Achievement
Roads	48,479 Kms	Completed – 17,571 Kms Under implementation –13,981 Kms To be awarded – 16,927 kms
Additional power generation capacity created Coal production (per annum)	78,700 MW	55,000 MW
	680 million tones reduced to 630 million tonnes	540 million tonnes
Crude oil production (per annum)	206.73 million tonnes	177.09 million tonnes
Gas production (per annum)	255.76 billion cubic metres	212.5 billion cubic metres
Railways capacity creation	21,500 Kms reduced to 15,000 Kms	14,752 Kms

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: Government of India

The major reason for underachievement apart from the global slowdown was the policy inaction by the Central Government; which finally came out of its shell and announced various important policy reforms on September 14th, 2012. The infrastructure sector will look at RBI on September 17th, 2012 for cuts in key policy rates for easing of interest rates. However, for ensuring the targeted growth rate immediate action is required to speed up the pace of implementation of infrastructure projects. This is crucial for removing supply bottlenecks which constrain growth in other sectors, and also for boosting investor sentiment to raise the overall rate of investment.

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