Plan panel pegs 12th Plan GDP growth lower at 8.5-8.7 per cent

The Planning Commission has projected a modest decline in the country's GDP growth rate to 8.5-8.7 per cent during the 12th Five Year Plan period (2012-17) against the earlier estimates of 9 per cent.

The second downward revision of the country's growth estimates comes in the backdrop of the downgrading of US sovereign rating by credit rating agency Standard and Poor's (S&P) and the slowdown in major economies of Europe following a financial market meltdown.

The commission had earlier lowered estimates of the country's GDP growth from 9.5 per cent to 9 per cent in the wake of the Eurozone crisis.

While the 12th Plan growth target is yet to be finalised, the Planning Commission was contemplating a higher growth target of over 9 per cent against the current plan growth estimates of around 8.2 per cent.

"Today I don't feel it will be 9 per cent... But we will definitely move to 8.5 per cent, 8.6 per cent, 8.7 per cent," minister of state for planning Ashwani Kumar said today.

The minister was responding to queries on the possible impact of the downgrade of US sovereign rating and the Eurozone crisis on the Indian economy.