This document outlines India's 12th Five Year Plan strategy for achieving faster, more inclusive, and sustainable economic growth. It discusses short and long-term challenges including reversing the current slowdown and achieving over 9% growth. The plan aims to make growth more inclusive by reducing poverty, improving regional equality, and generating employment. It sets targets across various social and economic indicators and proposes combining pro-poor programs with policies to promote inclusive growth. Achieving the plan's goals will require increasing investment, savings, and infrastructure while containing subsidies and fiscal deficits. Effectively implementing flagship programs while giving states flexibility is also emphasized. Challenges around energy, water, and alternative growth scenarios are also summarized.

1. What Next for
Faster, More Inclusive and Sustainable Growth
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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
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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
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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
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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
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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
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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
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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
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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
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11. Thank You