Montek Singh Ahluwalia says high inflation won't affect growth

Planning Commission Deputy Chairman Montek Singh Ahluwalia on Tuesday indicated that India can achieve 9 per cent growth during the 12th plan period despite the current weak global economic scenario and high inflation in the country.

"I don't believe that the present state of the global economy or the high rate of inflation is a reason for not aiming at nine per cent growth," Ahluwalia said delivering the 2nd Ramrao Adik oration in Mumbai.

The plan panel recently said that it is targeting a 9 per cent growth during the 12th five year plan period starting 2012 and 4 per cent growth in agriculture.

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Ahluwalia also pointed to the increasing ability of developing nations to grow without depending too much on the rest of the world.

"There is an autonomous growth capacity in the country which reflects in its own institutions, its human skills, its entrepreneurial skills etc. When you have that, then you have an autonomous growth capacity," he said.

On the rising food prices, Ahluwalia said it might be the result of rising incomes in rural areas.

Ahluwalia listed energy, water, managing urbanisation and governance delivery as the key challenges in meeting the growth objective.

As for the current fiscal (2011-12), the last year of the 11th Five Year Plan, the Prime Minister's Economic Advisory Council (PMEAC) has pegged the GDP growth at 8.2 per cent for the fiscal and the Reserve Bank of India expects it to be around 8 per cent.

As against that, during the first quarter ending June 30, the economy grew by 7.7 per cent due to poor performance of the manufacturing sector. The growth was 8.8 per cent in the April-June quarter in 2010-11.