While the Gross Domestic Product (GDP) growth in Tenth Financial Plan ending March 2007 is the highest growth ever achieved in a 5 year period, the rate of growth is expected to be lower than the projected 8% at 7.2% because of slowdown in manufacturing sector.
Planning Commission Deputy Chairman, Montek Singh Ahluwalia said that while a double digit growth was possible in the next financial plan, massive investments were necessary in agriculture and power. The power sector was more complicated and harder to achieve because the inputs (barring coal) were not in India’s control—oil, nuclear, or natural gas needs to be imported. Ahluwalia is confident that a 4% growth in agriculture is possible through efficient use of water through expansion of irrigation projects so dry-land areas can be cultivated.
To sustain the growth of Information Technology and services, there would be additional allocation of funds for education to up to 6% of the GDP. It is not clear if this increased amount will go to fund the expansion of capacity in premier higher educational centers to facilitate the reservation of Other Backward Classes or to raise the literacy level and educational facilities of government schools. The Federal Government had junked a plan that would have guaranteed literacy and education to all to buttresses a politically convenient reservation policy.
Ahluwalia cautioned that this was not finalized and that these thoughts were being accommodated in an Approach Paper to the 11th Plan that has not yet evolved to be approved