Bangalore, Jun 11 (IANS): The Planning Commission is set to target GDP growth of 9-9.5 percent for the 12th Five Year Plan (2012-17) period as 10 percent growth does not seem feasible, its Deputy Chairman, Montek Singh Ahluwalia, said Friday.

"Realistically, even 9 percent GDP growth will need strong policy action. We could aim at 9-9.5 percent growth for the 12th Plan period, as 10 percent growth may not be feasible," Ahluwalia said here.

Addressing the two-day regional conference of the five southern states here on the approach paper to the 12th Plan, he said the basic objective would be faster, more inclusive and sustainable growth.

"Energy, water and environment will be the major sectoral challenges that have to be addressed without sacrificing growth. We need better performance in agriculture for rapid and inclusive growth and manufacturing needs to grow at 11-12 percent per year to create three million additional jobs per year," Ahluwalia told the ministers and officials from Andhra Pradesh, Karnataka, Kerala, Puducherry and Tamil Nadu.

Noting that the growth target of nine percent set for 11th Plan (2007-12) may not be achievable due to the global financial crisis and drought in fiscal 2008-09, the deputy chairman said as per the mid-term appraisal, the revised growth target would be 8.2 percent as against 7.6 percent in the 10th Plan (2002-07).

"Though short of the nine percent target, the growth rate during the 11th Plan has been remarkable given the global crisis and drought. There was also progress on inclusiveness though less than expected and only some of the millennium development goals were met," Ahluwalia pointed out.

Admitting that inflation had accelerated in the last two years due to global pressure on food, oil and other commodity prices, Ahulwalia said even volatile financial conditions and exchange rates had created uncertain international environment.

Asserting that the country would be entering the 12th Plan from a very strong position, the deputy chairman said strong demand from all sectors had led to improvement in implementation, accountability and service delivery during the first fours of the 11th plan.

"To achieve the objectives of the 12th plan, the government's programmes need a new architecture, viz., greater localisation, breakdown of silos, feedback from citizens and mechanisms for learning and sharing of best practices," he noted.

Clarifying that land and infrastructure constraints posed a major problem in accelerating the growth rate, Ahluwalia said states should develop special industrial zones with connectivity and infrastructure.

"Citizens groups support the objectives of the government programmes. As design and institutional arrangements are weak, there is need for greater devolution and empowerment," he averred.

In the run-up to the finalisation of the 12th plan at the next National Development Council meeting in New Delhi in December, the plan panel held two regional level meetings for the northern and eastern states earlier.

"We had fruitful consultations with all the southern states on the approach paper to the 12th plan. The suggestions and inputs given by the respective states will be considered for the draft plan," Ahluwalia added.

Karnataka Chief Minister B.S. Yeddyurappa and his Andhra Pradesh counterpart Kiran Kumar Reddy participated in the day-long meeting.

Planning ministers from Kerala, Puducherry and Tamil Nadu represented the respective states along with their officials in the absence of their chief ministers at the meeting along.

The plan panel will hold similar consultations with western and north-eastern states later this year before the NDC meet.