New Delhi: The economy has to grow by 8.9 per cent annually in the next four years if the government wants to attain the Tenth Plan target of 8.0 per cent growth during 2002-07, a Parliamentary panel said in a report.

Since GDP (Gross Domestic Product) growth rate was estimated at 4.4 per cent during 2002-03, the Standing Committee on Finance said, "it might not be possible to achieve the target of 8.0 per cent till the GDP grows at an average growth rate of 8.9 per cent annually during the remaining four years of the Plan."

Although the main reason for the slow growth during 2002-03 was due to drought conditions resulting in 3.1 per cent drop in agriculture sector, other sectors have also recorded a dismal growth which was responsible for the poor GDP growth during the last fiscal, the panel, chaired by N Janardhana Reddy, said in its report tabled in Parliament.

The Committee asked government to take "corrective" measures to accelerate the rate of growth during the remaining four years of the Plan.

The panel expressed concern over the fall in both domestic savings and real investment during the first year of the Plan and said unless right steps were taken, the projected eight per cent growth was unlikely to be achieved.

The panel noted the economy had seriously suffered during the Ninth Five Year Plan and recorded an average growth rate of 5.5 per cent against the projected 6.5 per cent.

The shortfall in agriculture and manufacturing sectors, public investment, inability to use the capacity utilisation, global slowdown, Kargil war, natural calamities were stated to be the reasons for not attaining the targets.

PTI