Narendra Modi today criticised the Centre for lowering the 12th Plan growth target and felt that "significantly lowering the growth targets of the 12th Plan will further add to the mood of despondency and pessimism in the country and cast increasing doubts on the sustainability of the India growth story." He was speaking at the deliberations during the National Development Council meeting in New Delhi on Thursday.
Gujarat is one of the most industrialised states and Modi has every reason to complain on the pace of growth in India. Modi said there is no urgency or seriousness in tackling the economic crisis facing the country. There has been a virtual lack of direction in the macro-economic management of the country.
On Wednesday, the Planning Commission had lowered its growth forecast for the five years through 2017 to 8 per cent from a previous estimate of 8.2 per cent.
Today's meeting opened on a pessimistic note with Prime Minister Manmohan Singh hinting at tough decisions such as raising energy prices and cut in subsidies to achieve the 8 per cent growth target in the 12th Five-Year Plan.
Inaugurating the NDC meeting, Singh said the country faces many challenges to achieve sustainable growth. He said, "Achieving scaled down growth rate of 8 per cent in 12th Plan is an ambitious task."
Hinting at increasing energy prices while addressing the meeting, he said, "Immediate adjustment of prices to close the gap is not feasible but some phased price adjustment is necessary." He also said that as both the Centre and the states face resource constraints it was required "to increase the tax ratio as a percentage of GDP".
The Prime Minister said that "Unfortunately energy is under-priced in our country. Coal, petroleum products and natural gas are all priced below international prices. This also means that electricity is effectively underpriced for some consumers. Subsidies should be well designed and kept under fiscal limits."
The Prime Minister said that India was still a low-income country and for it to emerge even as a middle-income economy, 20 years of rapid growth was necessary.
The NDC, which comprises Cabinet Ministers and state Chief Ministers, is meeting here to approve the 12th Plan (2012-17) document.
Mamata and Jaya take on the government
West Bengal Chief Minister Mamata Banerjee has sought immediate help to lower the debt burden. She alleged that an unbearable debt burden of over Rs 2 lakh crore was thrust upon the current State Government by the previous Left front Governments which were permitted to borrow indiscriminately by the Central Government. She said that the debt service quotient of Rs 25,000 crore is due this year.
She said, "We have waited for a year-and-a-half but the patience of our people is running out."
Adding to the Centre's discomfort, Tamil Nadu Chief Minister J Jaylalithaa said, "the regime at the Centre, caught up in the daily squabbles of its constituents, merely to survive from day to day, has neither the time nor the inclination to pay attention to the problems of the people of this country."