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Financing the 12th Five Year Plan (2012 - 2017)
 

Financing the 12th Five Year Plan (2012 - 2017)

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    Financing the 12th Five Year Plan (2012 - 2017) Financing the 12th Five Year Plan (2012 - 2017) Presentation Transcript

    • FINANCING THE 12TH FIVE YEAR PLAN (2012 – 17)
    • Resources of the Centre for 11th PlanResources Projected for the 11th Plan (at 2006-07 prices): o GBS `1421711 crore o Central Assistance to States/UTs `324851 crore o Resources of CPSEs `1059711 crore o Central Plan Outlay `2156571Financing of the 11th Plan-Centre : (A) GBS to Central Plan (`1096860 crore) o BCR 46% o Borrowing 54% (B) IEBR of `1059711 crore
    • Financial Projection & Realization: Centre during the 11th Plan (2007-12) (` crore at 2006-07 prices) Sources of Funding Projection Realization % AchievementBCR 653989 -177679 -27.17Borrowings including net MCR 767722 1381639 179.97Net Flow from abroad 0 64563GBS for Plan 1421711 1268523 89.23CA to States/UTs’ Plan 324851 338913 104.33GBS for Central Plan 1096860 929610 84.75Resources of PSEs 1059711 684272 64.57Central Plan Outlay 2156571 1613882 74.84
    • Achievement of the 11th plan - Centre: Realization vis-à-vis Projection (` crore at 2006-07 prices) 11th Plan Realization 1613882 Central Plan Outlay 2156571 684272 Resources of PSEs 1059711 929610 GBS for Central Plan 1096860 338913 CA to States/UTs’ Plan 324851 1268523 GBS for Plan 1421711 64563 Net Flow from abroad 0 1381639Borrowings including net MCR* 767722 -177679 BCR 653989 Realization Projection
    • Achievement in the 11th Plan - Centre (Revenue receipt in the 11th Plan)As a percent of GDP revenue receipt, GTR, Net TR & NTRdeclined significantly between 2007-08 & 2011-12. o Revenue receipt declined by 2.2 percent point from 10.87% in 2007-08 to 8.66% in 2011-12. o GTR declined by about 1.71 percent point. o Net-TR declined by 1.56 percent point from 8.81% in 2007-08 to 7.25% in 2011-12. o NTR declined by 0.6 percent point from 2.05% in 2007-08 to 1.41% in 2011-12.Reasons for decline in NTR: (i) debt-consolidation andresetting of interest rate and (ii) disintermediation of theCentre in borrowing.
    • Achievement in the 11th Plan - Centre Non-plan Revenue Expenditure (NPRE)increased by 0.77 percent point of GDP from8.44% in 2007-08 to 9.21% in 2011-12 due to o Increase in Salary due to 6th pay commission o Increase in Subsidy expenditure o Fiscal concession and stimulus packageShortfall in aggregate non-debt resources andincrease in NPRE led to Negative BCRAs a result, Borrowing including net MCR was 109% ofthe GBS for 11th Plan.
    • Resources of the States/UTs for 11th PlanResources Projected for the 11th Plan (at 2006-07 prices): o State’s Own Resources `1163296 crore o Resources of SPSEs `128824 crore (included in SOR) o Central Assistance to States/UTs `324851 crore o Aggregate Plan resources `1488147 croreFinancing of the 11th Plan-States/UTs: o BCR 25.87% o Borrowing 43.64% o Central assistance 21.83% o SPSE 8.66%
    • Achievement in the 11th Plan – States/UTsAchievement of the States/UTs by 90.57%BCR realized by 71.26%IEBR of SPSEs exceeded the target by 4.2%Borrowing restricted to 92.44%State’s Own tax revenue increased due to Tax reforms such asVATShare in Central Tax improved due to enhanced sharerecommended by 13th FCNon-plan expenditure was higher than projected due to impactof 6th Play commission
    • Financial Projection & Realization: States/UTs during the 11th Plan (2007-12) (` crore at 2006-07 prices)Sources of Funding Projection Realization % AchievementBalance from current revenues 385050 274400 71.26Resources of PSEs 128824 134234 104.2Borrowings including net MCR 649422 600295 92.44State’s own resources 1163296 1008929 86.73CA to States’ and UTs’ Plan 324851 338913 104.33Aggregate plan resources 1488147 1347842 90.57GBS to Plan 1359323 1213608 89.28
    • Achievement of the 11th plan - States/UTs:Realization vis-à-vis Projection (` crore at 2006-07 prices) 11th Plan Realization 1213608 GBS to Plan 1359323 1347842 Aggregate plan resources 1488147 338913 CA to States’ and UTs’ Plan 324851 1008929 State’s own resources 1163296 600295 Borrowings including net MCR 649422 134234 Resources of PSEs 128824 274400 Balance from current revenues 385050 Realisation Projection
    • Challenges for Financing the 12th PlanSustaining high economic growth is crucial forrevenue buoyancy o The economy to recover from recent slowdown o The economic growth declined from 9.3% in 2007-08 to 6.2% in 2011-12.Fiscal deficit has increased continuously during the11th Plan period. o Fiscal deficit of the Centre, as a per cent of GDP, increased from 2.54 per cent in 2007–08 to 5.89 per cent in 2011–12 (RE). o Fiscal deficit of the States remained around 3% of GDP o Combined fiscal deficit (Centre and States) increased from 3.97 per cent in 2007–08 to 8.09 per cent in 2011–12 (RE). o Fiscal deficit of the Centre projected to decline to 3% of GDP by 2016-17 and combined deficit to within 6% of GDP.
    • Fiscal deficit as per cent to GDP during the 11th Plan 10 9.46 9 8 8.17 8.09 7 6.48 6.99 6 5.89 5.99 5 4.87 4 3.97 3.02 3 2.54 2 2.26 2.21 2.15 1 1.49 0 2007–08 2008–09 2009–10 2010–11 2011–12 (RE) Centre States Combined
    • Challenges for Financing the 12th Plan Non-Plan expenditure has also been increasing steadily as percent of GDP NPRE and its components (as percent of GDP) Items 2007–08 2011–12 RE Interest 3.43 3.11 Pension 0.49 0.63 Salary 0.89 1.13 Subsidies 1.42 2.44 Other NPRE 2.21 1.9(Total) NPRE 8.44 9.21 o The increase in pension and salary has been due to 6th pay Commission award. o There is an urgent need to rationalize the subsidy through necessary reforms to release resources for plan expenditure.
    • Challenges for Financing the 12th PlanResources for Plan being residual must come eitherfrom increased resource mobilization or reduction innon-plan expenditure.With FD target declining, the availability of debtresources will also get reduced.So, for making the required resources available, weneed to have higher economic growth for good taxbuoyancy, containment of non-plan expenditureincluding subsidies and adequate IEBR.
    • Public Sector resources for 12th Plan - CentreThe resource projection for the 12th plan assumes thefollowing: oAverage economic growth of 14.8% per annum. oFiscal deficit to decline from 5.1% of GDP in 2012-13 to 3.0% in 2016-17. oNet Tax revenue to increase from 7.6% of GDP in 2012-13 to 8.79% in 2016-17. oSubsidies to decline from 2.44% of GDP in 2011- 12 (RE) to 1.5% in 2016-17.
    • Public Sector resources for 12th Plan – Centre (at current prices) GBS: `3568626 crore. CA to the States’ and UTs’ Plan: `857786 crore. IEBR of Central public sector enterprises (CPSEs): `1622899 crore. Central Plan outlay: `4333739 crore. 12th Plan resources of the Centre (at current prices) (` crore) Sources of Funding ProjectionBCR 1387371Borrowings including net MCR 2181255GBS to Plan 3568626CA to States and UTs’ Plan 857786GBS for Central Plan 2710840Resources of PSEs including Borrowed Resource 1622899Total Resources for Central Plan 4333739
    • Public Sector resources for 12th Plan – States/UTs (at current prices) The Aggregate Plan resources: `3716385 crore States/UT’s own resources: `2858599 crore Central Assistance: `857786 crore 12th Plan resources of States/UTs (at current prices) (` crore) Sources of Funding State UTs TotalBalance from Current Revenues 885939 74040 959979Resources of PSEs 376043 4276 380319Borrowings 1494258 24043 1518301State’s Own Resources 2756240 102359 2858599CA to States’ and UTs’ Plan 816083 41703 857786Aggregate Plan Resources 3572323 144062 3716385
    • Overall Financing Pattern Overall Financing Pattern: 11th and 12th plan (at current prices) (` crore) Sources of Funding Eleventh Plan Realization Twelfth Plan Projection Centre States/UTs Total Centre States/UTs TotalBalance from Current Revenues –242390 381536 139146 1387371 959979 2347350 (–11.97) (22.11) (3.71) (32.01) (25.83) (29.16)Borrowings including net MCR 1751691 752815 2504506 2181255 1518301 3699556 (86.50) (43.62) (66.77) (50.33) (40.85) (45.96)Net Inflow from Abroad 80043 0.00 80043 – – – (3.95) – (2.13) – – –Centre’s GBS 1589344 – 1589344 3568626 – 3568626 (78.48) – (42.37) (82.35) – (44.33)Resources of PSEs/Local Bodies 857244 170039 1027283 1622899 380319 2003218 (42.33) (9.85) (27.39) (37.45) (10.23) (24.88)State’s Own Resources – 1304390 1304390 – 2858599 2858599 – (75.58) (34.77) – (76.92) (35.51)CA to States and UTs’ Plan –421458 421458 – –857786 857786 – (–20.81) (24.42) – (–19.79) (23.08) –Resources of Public Sector Plan 2025130 1725848 3750978 4333739 3716385 8050123Note: figures in parentheses are percentages of Resources of Public Sector Plan
    • (`Gross Budgetary Support 1589344 Gross Budgetary Support 3568626CA to States/UTs’ Plan 421458 CA to States/UTs’ Plan 857786GBS for Central Plan 1167886 GBS for Central Plan 2710840 GBS distribution between Central GBS distribution between Central and State Plan: 11th plan and State Plan: 12th plan CA to CA to States/UTs’ States/UTs’ Plan Plan 27% 24% GBS for GBS for Central Plan Central 73% Plan 76%
    • Sectoral allocation of GBS The GBS allocation of the Centre to major sectors has been made in tune with the approach adopted for the Twelfth Plan for ‘faster, sustainable and inclusive growth’. Twelfth Plan focuses on poverty reduction, ensuring access to basic physical infrastructure, health and education facilities to all. Biggest increase in allocation of Centre’s GBS is provided for Health and Child Development, Urban Development and Education. Allocation of Centre’s GBS by Major Sectors (at current prices) (` crore) Major Sectors 11th Plan 12th Plan % Increase over Realization Projection 11th PlanAgriculture and Water Resources 116554 284030 143.69Rural Development and Panchayati Raj 397524 673034 69.31Scientific Departments 58690 142167 142.23Transport and Energy 204076 448736 119.89Education 177538 453728 155.57Health and Child Development 112646 408521 262.66Urban Development 63465 164078 158.53Others 458849 994333 116.7Total Plan Allocation 1589342 3568626 124.53
    • Sectoral allocation of Central Plan Outlay 11th Plan 12th Plan Agriculture& General Agriculture& Special Area General Allied Activities Services Allied Services Special Area Programmes 3% 1% Activities Rural 1% Programmes 0% 3% Development 0% 6% Irrigation & Irrigation & Flood Control Rural Flood 0% Development Control 9% 0% Social Services 27% Social Services 30% Energy Energy 25% 25%Economic Economic Services Services Industry& 2% 4% Minerals Industry& 7% Minerals Science,TechnCommunication Transport Transport 7% ology & s 19% 20% Environment 3%Science,Technol 3% ogy & Environment Communicatio 3% ns 2%
    • Sectoral allocation of States/UTs Plan 11th Plan 12th Plan Special Area Special Area Programmes Rural Programmes Rural 2% Development 3% Agriculture& Development Agriculture& 6% Allied Activities 6%Allied Activities 7% 6% Irrigation & Irrigation & Flood Control Flood Control 12% 14% Industry&General General Energy MineralsServices Services 11% 2% 3% Energy 2% 11% Transport 11% Transport 12% Social Services Social Services 39% Industry& 42% Com Minerals munic 2% ations Communicatio Economic ns Services 0% 0% 4% Science,Techn Science,Techn Economic ology & ology & Services Environment Environment 3% 1% 1%
    • Sectoral allocation of 12th Plan (Centre & States) 11th Plan 12th Plan Special Area Programmes Irrigation & 1% Irrigation & Special Area Flood Control Flood Control Programmes 6% Rural Development 5% 1% Energy 6% Energy Agriculture &Allied Activities 19% Agriculture 19% 4% Rural & Allied Development Industry& Activities Industry& 8% Minerals 5% MineralsGeneral 5% General 5%Services Services 1% 1% Transport Transport 16% 17% Social Services Social Services 33% 35% Communicatio Communicatio ns ns 2% 1% Economic Science,Techn Science,Techn Services ology & ology & Environment Economic 2% Environment 2% Services 4% 2%