year 2007 - 08, the reserve bank's policy endeavour would be to contain inflation close to 5. 0 per cent. in the medium term, in recognition of india ’ s evolving integration with the global economy and societal preferences, the resolve, going forward, is to condition policy and expectations for inflation in the range of 4. 0 - 4. 5 per cent. medium - term prospects the approach paper for the eleventh five year plan ( 2007 - 08 to 2011 - 12 ) targets an average annual growth of 9 per cent relative to 8 per cent targeted by the tenth plan ( 2002 - 03 to 2006 - 07 ). this aspiration for growth would require significant acceleration in investment from 27. 8 per cent in the tenth five year plan to 35. 1 per cent in the eleventh five year plan. while half of the increase in investment is expected to come from private investment in farms, small and medium enterprises and in the corporate sector, the rest is estimated to emanate from public investment with a focus on the infrastructure sector. the higher level of investment is proposed to be financed by some combination of increased domestic savings and increased foreign savings. a significant portion of the required increase in domestic savings is expected to come from an improvement in government savings. household savings and private corporate savings can also play a major role in this regard. realising that the growth benefits need to trickle down further, the eleventh five year plan is likely to provide an opportunity to restructure policies to achieve a new vision based on faster, more broadbased and inclusive growth. doubling of agricultural gdp growth to around 4 per cent is particularly important in this context. the approach paper suggests that this must be combined with policies to promote rapid growth in non - agricultural employment so as to create 70 million job opportunities in the 11th plan. very recently on may 29, 2007, our honourable prime minister announced a major scheme to double the growth rate of agriculture to 4. 0 per cent over the 11th plan period. the government would provide rupees 250 billion for new farm initiatives launched by states. a time - bound food security mission was also announced to counter rising prices of food products and to ensure visible changes in their availability over three years. if these objectives are achieved, the percentage of people in poverty could be reduced by 10 percentage points by the end of the plan period. the policy reforms and monitorable targets as indicated in the approach paper, particularly on education, health, women and children, infrastructure, when attained, are expected to

some fiscal strains, it is hoped that there will be no directional change. the annual rate of growth in broad money ( m3 ) was 22. 3 per cent in 1994 - 95, but dropped subsequently, pulling down the annual average growth rate between 1994 - 95 and 199697 to 17. 3 per cent and in the current year it should be around 15. 5 per cent. there is a similar pattern in regard to inflation, which averaged 7. 4 per cent between 1994 - 95 and 1996 - 97 and the wholesale price index this year is estimated to be around 6 per cent, less than last year ’ s 6. 9 per cent. finally, non - food credit growth has averaged 21 per cent per annum in the last three years and this year it is expected to be around 20 per cent including investments in psu and corporate bonds, debentures and cp. as you may be aware, the latest cso estimate places gdp growth of 1996 - 97 at 7. 5 per cent and net capital inflow from abroad for the last two years has been placed at 1. 86 and 1. 15 per cent of gdp at market prices. external sector on the external front, in sdr terms, exports have grown at 13. 6 per cent and 16. 7 per cent during 1994 - 95 and 1995 - 96 while imports have grown at 18. 0 and 23. 7 per cent. last year, ( 1996 - 97 ) there has been a deceleration to 9. 6 and 10. 6 per cent, respectively. this year, during april - december, growth of exports was 9. 1 per cent and that of imports 13. 5 per cent, both in sdr terms. the foreign direct investment flows continue to rise and are us $ 2. 5 billion during april - december 1997 - 98 as against $ 2. 7 billion during the whole of 1996 - 97. more important, the policy framework and the procedures ensure that most of the value of fdi flows to infrastructure and productive sectors. fii investments during the current year so far are less compared to $ 1. 9 billion for the entire 1996 - 97 period ; but, it is expected that it would be at least $ 1 billion during this year. the flows on account of external aid last year, commercial borrowings and non - resident deposits are positive on a net basis, and broadly as per expectations at the beginning of the year. the invisibles have also been on track and as a result, the