Mumbai: India is aiming to achieve 10-per cent annual GDP growth by the year 2011-12, but the country needed over $300 billion to upgrade its infrastructure over the next five years, prime minister Manmohan Singh told a meeting of the Planning Commission.

The country needed double-digit growth in manufacturing and services sectors in the next five years, and had to double farm output, if it was to meet the target, he pointed out.

The Indian economy has grown at an average eight per cent in the past three years, and a 10 per cent annual GDP growth is difficult to achieve unless the country improves its infrastructure.

"Infrastructure development is a major constraint on our industrial growth," and "we would need more than Rs1,400,000 crore ($308 billion) by 2012," the prime minister, who is also the chairman of the planning commission, said.

He said some of the investment in infrastructure would have to come from the private sector.
But private players have been slow to invest in power projects and roads due to the absence of proper user charges.

Analysts say India will need to raise its household savings and investment rates as a percentage of GDP so it can spend more and achieve a higher growth trajectory.

The plan panel, meanwhile, said in an approach paper prepared in June that investment as a percentage of GDP should go up to 33.6 per cent, while the savings rate must hit 31 per cent - the rest coming from foreign investment - to target an 8.5 per cent annual growth rate.

The commission had pegged annual growth target for the farm sector at 3.9 per cent, at 9.9 per cent for industry, and at 9.4 per cent for the services sector. Exports need to grow at 16 per cent and imports by 12.1 per cent to rein in the current account deficit at 2.6 per cent of GDP during the next five-year period, the paper pointed out.