Arun Maira sets alarm bells ringing, warns of under-5% economic growth for India
Planning Commission member Arun Maira today warned that economic growth rate could fall below 5 per cent if there is deep policy and governance paralysis.
Addressing an international seminar on design organised by industry body CII here, Arun Maira said: "By muddling around, and if there is a deep policy paralysis, a governance paralysis, we could get around 5 per cent or even lower growth rate in the coming years."
"6.5 percent growth for the next eight years or so is very likely if we keep delaying (some) crucial decisions", he said.
The National Development Council (NDC) has already scaled down the average growth target for the 12th Plan to 8 per cent from 8.2 per cent envisaged earlier. The average growth rate was 7.9 per cent in 11th Plan (2007-12).
The country recorded 9-year low annual economic growth of 6.5 per cent in 2011-12. The economy has grown by 5.4 per cent in the first half of this fiscal (April-September).
Maira said the country cannot afford to have such low growth rates as we need to create millions of new jobs.
Stating that manufacturing is very critical, he said the country has not done well on the manufacturing front during the past 15-20 years.
Blaming it on poor infrastructure, Maira said, "What's coming in the way of growing manufacturing is physical infrastructure like roads, power etc. Infrastructure doesn't support competitive manufacturing here."
About the regulatory environment, he said, "We are one of the worst places to do business in the world because our regulations are outdated, they are too many and they tangle with each other and they are badly administered."
Calling for better governance systems, he said the Planning Commission is insisting on a study of government programme architecture, which should become more local. In the current model, the government "is working in silos", he said.