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. 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. 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. Strategy for Achieving Inclusiveness
• There are two routes to inclusiveness
through higher growth which expands income and
employment opportunities
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 more revenues, to finance
inclusiveness programmes
Many inclusiveness programmes (health and education)
contribute to growth
5
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. 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. 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. 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. 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