12th five year plan of india summery

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12th five year plan india, summary

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12th five year plan of india summery

  1. 1. What Next for Faster, More Inclusive and Sustainable Growth 1
  2. 2. Twelfth Plan Strategy • There are Short Term and Medium Term Challenges • Short Term : Reverse the current growth slowdown : 5.5 percent in 2012-13, Aim for 6.5 to 7 percent in 2013-14 • Longer Term : Get back to high growth. This requires accelerating from 5.5% in 2012-13 to over 9% in last two years • This is very difficult, especially given the global situation 2
  3. 3. Growth must not only be rapid, but also more inclusive • Inclusiveness is a multi-dimensional concept :  Reduce poverty  Improve regional equality across states and within states  Improve conditions for SCs, STs, OBCs, Minorities  Generate attractive employment opportunities for youth  Close gender gaps • Twelfth Plan lists 25 monitorable indicators 3
  4. 4. 25 Monitorable Targets, e.g. • Average GDP Growth of 8 percent • Agriculture Growth of 4 percent • Reducing head-count poverty by 10 percentage point • Generating 50 million work opportunities • Eliminating gender and social gap in education • Reducing IMR to 25, MMR to 100 and TFR to 2.1 • Enhance infrastructure investment to 9% of GDP • Achieve universal road connectivity and access to power for all villages • Access to banking services for 90 percent households • Major welfare benefits and subsidies via Aadhaar 4
  5. 5. Strategy for Achieving Inclusiveness • There are two routes to inclusiveness  through higher growth employment opportunities which expands income and  through government pro-poor programmes which target poorer groups • Both are important. Twelfth Plan combines the pro-poor programme approach with efforts to get a growth pattern which is faster and inherently more inclusive • Two routes are mutually reinforcing  High growth generates inclusiveness programmes more revenues, to finance  Many inclusiveness programmes (health and education) contribute to growth 5
  6. 6. Macro-Economic Challenges in Achieving High Growth • Must increase the rate of investment, especially in infrastructure • Domestic savings must increase even more to reduce the investment saving gap which is necessary to keep the Current Account Deficit under control • Government dis-savings must be eliminated. This means fiscal deficit must be reduced • Growth of subsidies has to be contained • 75% of the investment in the economy is private investment (household plus corporate) • Both the Centre and the States have to create an eco-system that encourages private investment • Infrastructure, especially quality of power, and availability of skills is critical 6
  7. 7. Effectiveness of Plan Programmes • Twelfth Plan sets ambitious targets for Flagship Programmes in areas of Health, Education, Rural infrastructure, Livelihood Development etc. • Too much focus on the level of expenditure in these programmes. Not enough on effectiveness in terms of end results • Implementation in the field is the responsibility of State Government agencies. However, programme guidelines are set by the Central Government • There are demands for greater flexibility from states. We are responding as follows :  Guidelines are being made more flexible to meet the requirements of individual States  10% flexi-fund within each scheme for innovations 7
  8. 8. Energy • 8 percent GDP growth requires 6 percent growth in energy supply from all sources • Our fossil fuel resources are limited, and our import dependence is already high • Enhanced Energy Efficiency in all sectors • We need to push push for renewable Energy: Wind, Solar and Storage Hydro • Difficult Policy Issues:  Coal vs. Forest Cover  Petroleum Price Distortions  Natural Gas Exploration Framework  All Energy Prices: Coal, Petroleum product, Natural Gas and Electric power are currently under priced. Fuel adjustment is needed 8
  9. 9. Water • Management of water resource is a major challenge. Estimates of water availability have been optimistic • Twelfth Plan proposes modified AIBP and expanded Watershed Management Programme • Water sector needs better Regulatory Framework  New Groundwater Law  Water Regulatory Authorities in each state  National Water Framework Law • Agriculture accounts for 80% of water use at present, must shift to more water efficient agriculture practices • Manage urban and industrial water demand through water recycling and rationalise user charges 9
  10. 10. Alternative Scenarios • 12th Plan goal of 8% inclusivve growth is not a foregone conclusion • Depends on difficult policy decisions to be taken by Centre and States • For the first time Plan presents three scenarios Strong Inclusive Growth 8% Insufficient Action 6 to 6.5% Policy logjam 5 to 5.5% • Anything much less than 8% will not satisfy aspirations of the people 10
  11. 11. Thank You

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