Planning Commission - Annual Report 1996-97

Abstract

From Introduction: The Eighth Five Year Plan (1992-97) was launched immediately after the initiation of a set of stabilisation and structural adjustment measures, which were designed to combat the then prevailing crisis in the balance of payments (BoP) and resources position of the Government, in 1991. The Plan took into account some of the changes that were expected to come about due to these reforms. The Plan also kept in view the poor performance of the economy in the base year (1991-92). The overall growth was estimated to be negligible during the base year. The annual inflation rate was ruling at double-digit level. On the balance of payments front, although there was some improvement in the foreign exchange reserves, exports were exceptionally sluggish. Given this performance of the economy in 1991-92, the Eighth Plan set down somewhat cautious macroeconomic targets. The plan aimed at an annual average growth rate of 5 .6 per cent and an average industrial growth rate of about 7.5 per cent. These growth targets were planned to be achieved with relative price stability and a substantial improvement in the country's balance of payments. It was envisaged that the ratio of current account deficit will be maintained at about 1.6 per cent. The performance of the economy during the first four years of the Plan indicate that most macro-economic targets would be achieved by the end of the terminal year (1996-97).