India needs US$1 trn for infra spending: PM

India will need to spend US$1 trillion in infrastructure in the 12th Five-Year Plan, Prime Minister Dr. Manmohan Singh said. He also said that the Indian economy will grow by 8.5% in FY11 and 9% in FY12. He reiterated the Government's long-term goal of attaining 10% GDP growth. "The Government's 10% GDP growth target is ambitious but not impossible," the Prime Minister said. Recent economic performance has been commendable on several counts, Dr. Singh said, adding that progress in the power sector growth is less than satisfactory.

Separately, Finance Minister Pranab Mukherjee said that the Centre is aiming to spend US$514bn in the infrastructure sector by 2012. Core sector growth is key for attaining 9-10% GDP growth, he added. The deficit in the country's power output remains worrisome, Mukherjee said. The Indian economy grew by 6.7% in 2008-09 and has accelerated to 7.2% in 2009-10. The Government would allow private sector companies to issue infrastructure bonds to raise funds for core sector projects, the Finance Minister said. The deficit in the country's power output remains worrisome, Mukherjee said.

A meeting of the full Planning Commission conducted a mid-term review of the 11th Five Year Plan (2007-12), and lowered India's targeted growth of 9% per annum because of the two trying past years. "The average rate of growth in the plan period could be a little over 8%," said the appraisal document that was placed before the high-level meeting, chaired by the Prime Minister, while assuring a return to high growth in the medium term. He said the past two years were particularly difficult for the Indian economy due to the global slowdown, and this was exacerbated by a poor monsoon and the consequent drop in food production.