NITI Aayog has estimated a growth rate of 8% for 2016-17 as per a ‘cautiously optimistic’ prognosis it has laid out in the appraisal document for the Twelfth Five-Year Plan, flagging the lack of reforms in land acquisition, labour and simplification of administrative procedures as impediments to growth.

The review, however, does not take into account the impact of demonetisation.

The 12th Plan is the last five-year Plan and from 2017-18, the Centre would adopt a three-year action plan and a fifteen-year vision document.

A NITI Aayog official said the new action plan would be finalised in two months’ time and will also take into account the impact of demonetisation.

“There are reasons to be cautiously optimistic about the prospects of above 8 per cent growth in 2016-17,” the Aayog has said in its review of the 12th Five-Year Plan.

Stating that a large number of reforms by the present government over the past two years created a ‘strong foundation’ for such a growth trajectory, the government think-tank said caution was essential as reforms in areas such as skill development, infrastructure, labour laws and land acquisition are far from complete.

NITI Aayog stated that much needed to be done to spell out tax laws clearly so that future investors can assess their liabilities with reasonable certainty.

“Urgent attention” was needed for simplification of regulatory cum administrative procedures “or what has come to be popularly referred to as ease of doing business,” it said.

A key lacuna in the Indian growth story has been slow growth of manufacturers in general and labour-intensive manufacturing in particular. Sectors in which India lags behind are electronics, food processing, leather, and textiles and garments.