But the Indian Prime Minister Dr Manmohan Singh and the Deputy Chairman of the Planning Commission Montek Singh Ahluwalia still feel that it is an “ambitious” target.

“This is a reasonable modification (in 5-year growth target) but I must emphasise that achieving an average of 8 percent growth, following less than 6 percent in the first year, is still an ambitious target,” said the Prime Minister Dr Manmohan Singh while inaugurating the 57th meeting of the National Development Council (NDC), here on Thursday.

The NDC meeting was convened to approve the 12th Plan document. The NDC consists of chief ministers of States and administrators/Lt Governors of Union Territories.

The Tamil Nadu Chief Minister, J Jayalalithaa walked out of the NDC meeting when she was not allowed to read her speech beyond the 10-minute allotted time. She said that this was the first time in a NDC meeting where the Chief Minister’s speech was confined to only 10 minutes.

The Gujarat Chief Minister Narendra Modi said that noticing that the central government was in a panic situation he suggested ways for achieving high growth rate. He said that if central government does not take corrective action in time, there may be a possibility of “the economy slipping down to negative growth zone.”

Modi mooted the idea of setting up of a Natural Resources Commission on the lines of the Finance Commission for judicious distribution of natural resources.

On modification of the 5-year growth target, the Deputy Chairman of the Planning Commission Montek Singh Ahluwalia said : “The scenario remains an ambitious one and the modification proposed is only a recognition of reality. We will incorporate suitable modification in the text to suitably reflect this adjustment.”

Spelling out his priority for reviving the economy, Prime Minister Dr Singh said :”the global slowdown combined with some domestic constraints has meant that our growth has also slowed down. Our first priority must be to reverse this slowdown.”

The Prime Minister said “the most immediate problems we need to tackle are the implementation problems affecting large projects, including especially power projects, which are stuck because of delays in getting clearances and fuel supply agreements.”

He said the government had taken a number of steps to deal with the problem including setting up of a new Cabinet Committee on Investment.

Dr Singh cautioned that high growth path will definitely not materialize if we follow a “business as usual” policy.

He called for increasing productivity and increasing total employment in agriculture and urged for moving people out of agriculture by giving them gainful employment. Only few people should remain in agriculture. The manufacturing sector needs to grow at double digit level. He favoured PPP projects in infrastructure.

The Prime Minister appealed to the States for helping in introduction of Goods and Services Tax (GST) regime for improving the tax ratio as percentage of GDP.

Dr Singh hinted at increasing energy prices in phases and setting up of a Water Regulatory Authority for efficient use of water.

The Deputy Chairman of the Planning Commission Montek Singh Ahluwalia said : “Unlike previous plans, the Twelfth Plan does not present a single growth projection. Instead, it recognizes that growth outcomes will depend upon the extent to which we are able to take difficult decisions needed to intervene at key leverage points to generate inclusive growth.”

Ahluwalia suggested three possible scenarios of future growth. If there is successful policy interventions at multiple leverage points it will generate virtuous growth circles of strong inclusive growth. In this strategy 8% growth target can be achieved.

In the second possible scenario, if the policies move in right direction but are not fully implemented, then the growth will be limited to 6% to 6.5%.

In the third possible scenario where there may be policy logjam, the growth will be stuck between 5% to 5.5%.

Ahluwalia said that on the suggestions of the State governments the restructured centrally sponsored schemes (CSSs) giving flexibility to the States will be implemented from April 1, 2013.