The average targetted growth rate for the Eleventh Plan period is 8.38 per cent and it is for the first time that the economic advisors to the government were expecting a much deeper impact than ever before on the Indian economy of the global crisis. Dr Ahluwalia was of the view that the adverse global situation could continue for about two years, thus impinging on the growth prospects of the Indian economy.
Dr Ahluwalia and Dr Sundaram made these comments to the media after participating in a seminar on ''Global economic slow down; implications for India'', organsied by the Planning Commission.
Dr Kirit Parikh, member Planning Commission, also gave his assesment of the situation.
Dr Ahluwalia said if one or two negatives could be eliminated from the global scenario then the decline of the growth rate would come down by 0.5 per cent to one per cent. These could be falling global commodity prices, lower rate of inflation and an improvement in the Balance of Payments situation, primarily due to lower prices of imports, Dr Ahluwalia, however, said the intensity of the lowering of growth rate would depend upon the domestic contra-cyclical measures that are taken by Indian authorities. These could be fiscal moves, including enhanced spending on infrastructre, and improvements in productivity.
Dr Tendulkar said in July the Council had projected a growth rate of 7.7 per cent in July, but in their next forecast seeing the magnitude of the global meltdown, the EAC may bring down its foreacast to seven per cent, ''notwithstanding a few decimals this way or that way''.
At the seminar presentations were made by four premier research bodies -- National Council for Applied Economic Reserach (NCAER), Institute of Economic Growth, Indian Statistical Institute, Bangalore, and Indira Gandhi Institute of Development Research, Mumbai.
A presentation was also made by the Planning Commission team.
The seminar considered 20 different simulation model and four major models by the premier research institutes. The variables were different worsening situations of the global economy.