Sunday, November 27 2005 15:21 Hrs (IST) - World Time -

New Delhi: The constraints of coalition politics will not hinder achieving an 8 per cent growth, but targeting a higher growth rate of 10 per cent would be 'hugely difficult', Planning Commission Deputy Chairman Montek Singh Ahluwalia said today (Nov 27, 2005).

"It is tempting to go for a double digit growth of 10 per cent. But with coalition, it looks hugely difficult," Ahluwalia said addressing the India Economic Summit.

"Coalition politics is consistent with 8 per cent growth. Policy requirement for this kind of growth is huge. It is not only change in policies; we also need to see if they are delivering properly. As of now we have a lot to do to achieve the 8 per cent growth," Ahluwalia said.

"Let us be practical and go for 8 per cent growth now, though not many people seem to be impressed by such growth," he added.

Ahluwalia said that during the 11th Plan, the Commission will make an effort to incorporate such changes which would indicate that in case certain developmental programmes as mentioned in the plans are not undertaken, what would happen then.

Ahluwalia said growth slackened after the first round of reforms in the 1990s and in mid 1990s, growth rate averaged between 5.6-5.8 per cent though in the turn of this millennium it averaged around 6.5 per cent. The current year would be good but to achieve the targeted growth rate of 7-8 per cent the government would have to focus on improving the state of infrastructure, education and health.

The Deputy Chairman of Planning Commission said sectoral reforms were key to infrastructure development. The government has laid out an agenda for public private partnership, "a lot of learning is going on. In the beginning we may not have got all of it right and now we are trying to to make adjustments".

He said the model concession agreement prepared by the government would resolve many of the issues including the issue of risk sharing in a public private partnership project.

On the democratic process, Ahluwalia said though it may appear to be taking time for a consensus over critical issues and the heated debates actually help in the long run so that not too many mistakes are committed.