Author: Parveen Kaswan (Follow for more updates)
So with the approval of the 12th five year plan by National Development Council last month country got new targets in the field of economy and its growth. Besides discussions on the Approach Paper, the NDC also took stock of the economy in the backdrop of sluggish growth and persistent high inflation, and as we know inflation is hovering at very high around the double-digit mark. The country is estimated to register an average growth rate of 8.2 per cent in the current Plan (2007-12).
The Draft Approach to the 12th Five Year Plan (2012-2017) has been approved by the National Development Council last month. The theme of the Approach Paper is “faster, sustainable and more inclusive growth”. The Approach Paper in broader sense laid down the major targets of the Twelfth Plan, the key challenges in meeting them and the broad approach to be followed to achieve the stated objectives. It proposes a growth target of 8 percent. However in view of the uncertainties in the global economy, and challenges in the domestic economy, achieving the growth rate of 9 percent may not be feasible unless difficult decisions are taken. And this uncertainty was also discussed in the process. The document has projected the aggregate Plan resources at Rs37.16 lakh crore during the five year period starting 2012-13.
The growth target was earlier projected high but now Planning Commission feels 8% target is more feasible, and revised the estimate for the second time after slashing it down to 8.2% just three months back from 9%. So in a new trend moving away from previous practice of presenting single growth projection, the Planning Commission has come out with three different economic scenarios for 12th Five-Year Plan. According to planning commission these scenarios will be a function of economic decisions and “policy logjam”, and in worse scenario the GDP growth could slow down to 5-5.5 per cent.
In a good move the document proposes to bring down poverty by 10 percentage points by the end of the 12th Plan and generate five crore new jobs in non-farm sector. For Infrastructure sector document talks about the positive efforts which should be made to increase investment in this sector to 9 per cent of the GDP by the end of the Plan period.
Some other major targets are:
- Increasing green cover by one million hectare every year and adding 30,000 MW of renewable energy generation capacity in the Plan period.
- To reduce emission intensity of the GDP in line with the target of 20-25 reduction by 2020 over 2005 levels.
- Raising agriculture output to 4 per cent for the full Plan.
- Manufacturing sector growth to 10 per cent for the full Plan.
- Target of adding over 88,000 MW of power generation capacity in the 12th five year plan.
It also wants all the states to set higher targets of growth than what was achieved in the 11th Five Year Plan. All the targets are welcome step and now total care should be taken in implementation process, because that is the field where our government lacks efficiency. In a small blow to the projections, the document envisages 6.7 per cent growth rate in the current fiscal, but now it has been projected at 5.7-5.9 per cent in 2012-13 by the Finance Ministry.