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Eighth Plan The Eighth Plan (1992–97) was launched in a typically new economic environment. The economic reforms were already started (inJuly 1991) with the initiation of the structural adjustment and macro-stabilisation policies necessitated by the worsening balance of payments, higher fiscal deficit and unsustainable rate of inflation. This was the first plan which went on for an introspection of the macro-economic policies which the country had been pursuing for many decades. The major concerns and pathbreaking suggestions which this Plan articulated may be summarised as follows: (i) an immediate re-definition of the state’s role in the economy was suggested; (ii) ‘market-based’ development advised in areas which could afford it, i.e., a greater role for the private sector in the economy; (iii) more investment in the infrastructure sector, especially in the laggard states as the ongoing emphasis on greater private sector investment could not be attracted towards these states;(iv) rising non-plan expenditure and fiscal deficits need to be checked; (v) subsidies need restructuring and refocussing; (vi) planning immediately needs to be ‘decentralised’; (vii) special emphasis on ‘co-operative federalism’ suggested; (viii) greater focus on ‘agriculture’ and other ‘rural activities’ was suggested for which the Plan cited empirical evidences as they encourage the economy to achieve enhanced standard of living for its people and to promote the cause of balanced growth—a shift in the mindset of planning.
As the economy moved towards liberalisation, criticism came from every quarter against the move. The process of planning was also criticised on the following counts: (i)As economy moves towards the market economy, the planning becomes ‘irrelevant’; (ii)When the state is ‘rolling back’, planning makes no sense; (iii)The planning process should be ‘restructured’ in the era of liberalisation; and (iv)There should be increased thrust on the ‘social sector’ (i.e., education, healthcare, etc.)
Ninth Plan The Ninth Plan (1997–2002) was launched when there was an all round ‘slowdown’ in the economy led by the South East Asian Financial Crisis (1996–97). Though the liberalisation process was still criticised, the economy was very much out of the fiscal imbroglio of the early 1990s. With a general nature of ‘indicative planning’, the Plan not only did target an ambitious high growth rate (7 per cent), but also tried to direct itself towards time-bound ‘social’ objectives. There was an emphasis on the seven identified Basic Minimum Services (BMS) with additional Central Assistance for these services with a view to obtaining complete coverage of the population in a time-bound manner. The BMS included: (i) Safe drinking water; (ii) Primary health service; (iii) Universalisation of primary education; (iv) Public housing assistance to the shelterless poor families; (v) Nutritional support to children; (vi) Connectivity of all villages and habitations; and (vii) Streamlining of the public distribution system.
The issue of fiscal consolidation became a top priority of the governments for the first time, which had its focus on the following related issues: (i) Sharp reduction in the revenue deficit of the government, including centre, states and the PSUs through a combination of improved revenue collections and control of in-essential expenditures; (ii) Cutting down subsidies, collection of user charges on economic services (i.e., electricity, transportation, etc.), cutting down interest, wages, pension, PF, etc; (iii) Decentralisation of planning and implementation through greater reliance on states and the PRIs.
Tenth Plan The Plan (2002–07) commenced with the objectives of greater participation of the NDC in their formulation. Some highly important steps were taken during the plan, which undoubtedly points out a change in the planning policy mindset of the government, major ones being:84 (i) Doubling per capita income in 10 years; (ii) Accepting that the higher growth rates are not the only objective—it should be translated into improving the quality of life of the people; (iii) For the first time the Plan went to set the ‘monitorable tragets’ for eleven select indicators of development for the Centre as well as for the states; (iv) ‘Governance’ was considered a factor of development; (v) States’ role in planning to be increased with the greater involvement of the PRIs; (vi) Policy and institutional reforms in each sector, i.e., reforms in the PSUs, legal reforms, administrative reforms, labour reforms, etc; (vii) Agriculture sector declared as the prime moving force (PMF) of the economy; (viii) Increased emphasis on the social sector (i.e., education, health, etc.); (ix) Relevance between the processes of economic reforms and planning emphasised; etc.
The Mid-term Appraisal of the Plan was approved by the NDC in June 2005. The assessment gives a mixed picture regarding its performance. As per the appraisal, the country performed well in many areas and these gains needed to be consolidated, but there were some important weaknesses also, which, if not corrected, can undermine even the current performance level.
Eleventh Plan The Plan targets a growth rate of 10 per cent and emphasises the idea of ‘inclusive growth’. In the approach paper, the Planning Commission shows its concerns regarding realising the growth targets on account of the compulsions towards the Fiscal Responsibility and Budget Management Act. In recent times some aberrations in the economy have started to increase the government’s concerns in meeting the Plan target of 10 per cent growth. The major concerns are: (i) A higher inflation (above 6 per cent) led to the tightening of the credit policy forcing lower investment in the economy (which will lower production); (ii) A stronger rupee is making export earnings shrink fast; (iii) Costlier foodgrains and other primary articles playing havoc for the poor masses; (iv) Costlier oil prices becoming a burden for the national exchequer; etc. Not only the government but the Confederation of Indian Industry (CII) as well as the World Bank expressed doubts in the Eleventh Plan realising the ambitious 10 per cent growth.
Twelfth Plan The ‘Draft Approach Paper’ of the Twelfth Plan (2012–17) was prepared by the Planning Commission after widest consultation till date— recognising the fact that citizens are now better informed and also keen to engage. Over 950 civil society organisations across the country provided inputs; business associations, including those representing small enterprises have been consulted; modern electronic and ‘social media’ (Google Hangout) were used to enable citizens to give suggestions. All state governments, as well as local representative institutions and unions, have been consulted through five regional consultations. Though the Approach Paper for the Plan was approved by the NDC by mid-2011, the Plan Document was finalised much later after the launch of the plan (like the Tenth and Eleventh Plans).
The Draft Approach Paper lays down the major targets of the Plan, the key challenges in meeting them, and the broad approach that must be followed to achieve the stated objectives which are summed-up as follows: (i) Growth rate of 9 per cent is targeted for the Plan. However, in view of the uncertainties in the global economy and the challenges in the domestic economy, the Approach Paper indicates that it could be achieved only if some difficult decisions are taken. (ii) It emphasizes the need to intensify efforts to have 4 per cent average growth in the agriculture sector during the Plan period; with foodgrains growing at about 2 per cent per year and non-food grains (notably, horticulture, livestock, dairying, poultry and fisheries) growing at 5 to 6 per cent. (iii) The higher growth in agriculture would not only provide broad based income benefits to the rural population but also help restrain inflationary pressure, which could arise if high levels of growth are attempted without corresponding growth in domestic food production capabilities. (iv) It proposes that the major flagship programmes which were instrumental for promoting inclusiveness in the Eleventh Plan should continue in the Twelfth Plan—there is a need to focus on issues of implementation and governance to improve their effectiveness. (v) The Plan indicates that the energy needs of rapid growth will pose a major challenge since these requirements have to be met in an environment where domestic energy prices are constrained and world energy prices are high and likely to rise further. (vi) For the GDP to grow at 9 per cent, commercial energy supplies will have to grow at a rate between 6.5 and 7 per cent per year. Since India’s domestic energy supplies are limited, dependence upon imports will increase. Import dependence in the case of petroleum has always been high and is projected to be 80 per cent in the Twelfth Plan. (vii) Even in the case of coal, import dependence is projected to increase as the growth of thermal generation will require coal supplies, which cannot be fully met from domestic mines. (viii) It suggests the need to take steps to reduce energy intensity of production processes, increase domestic energy supply as quickly as possible and ensure rational energy pricing that will help achieve both objectives, viz., reduced energy intensity of production process and enhance domestic energy supply, even though it may seem difficult to attempt. (ix) It draws attention to evolving a holistic water management policy aiming at more efficient conservation of water and also in water use efficiency, particularly in the field of agriculture. (x) It argues that a new legislation for land acquisition is necessary, which strikes an appropriate balance between the need for fair compensation to those whose land is acquired and whose livelihood is disrupted, and the need to ensure that land acquisition does not become an impossible impediment to meeting our needs for infrastructure development, industrial expansion and urbanisation. (xi) It maintains that health, education and skill development will continue to be the focus areas in the Twelfth Plan, and that there is a need to ensure adequate resources to these sectors—‘universal healthcare’ proposed by it, emphatically. Simultaneously, it also points to the need to ensure maximum efficiency in terms of outcomes for the resources allocated to these sectors. The need to harness private investment in these sectors has also been emphasised by the approach. (xii) It takes cognizance of the fact that achieving 9 per cent growth will require large investments in infrastructure sector development—notes greater momentum to public investment and Public Private Partnerships (PPPs) in infrastructure sector needs to be imparted so that present infrastructure shortages can be addressed early. (xiii) It has emphasised the importance of the process of fiscal correction. However, the paper cautions that fiscal consolidation would imply that total resources available for the Plan in the short run will be limited. Resource limitations imply the need to prioritise carefully and that some priority areas, e.g., health, education and infrastructure will have to be funded more than others. (xiv) It also emphasizes the need for focusing more on efficient use of available resources in view of the resource constraints. The Paper makes several suggestions in this regard, including giving implementing agencies greater amount of freedom, flexibility, promoting convergence between resources from different Plan schemes and the need for much greater attention to capacity building, monitoring and accountability.
By: Chetna Yaduvanshi ProfileResourcesReport error
Anisha Sharma
Sir discuss on problem of development in five years planning and what are the challenges ?
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