HS-201 : Economics Presentation

By-Ashok Tak (12115028)

What is plan?

• A plan spells out how the resources of a nation should be put to use.

• It should have some general goals as well as specific objectives which are to be achieved within specific period of time.

• In India, plans are of five year duration and are called FIVE YEAR PLAN.

PLANNING COMMISSION

• The planning commission is an organization in the government of India which formulates India's five year plan .

• It was Set up on 15 Mar, 1950 with prime minister Jawaharlal Nehru as the chairman.

• Now Mr. Montek Singh Ahluwalia holds the position of deputy chairman.

Five year plan Period Target growth rate of GDP (%)

Achievement (%)

First plan 1951-56 2.1 3.6

Second plan 1956-61 4.5 4.21

Third plan 1961-66 5.6 2.72

Fourth plan 1969-74 5.7 2.05

Fifth plan 1974-79 4.4 4.83

Previous Five Year Plans

Five year plan Period Target growth rate of GDP (%)

Achievement (%)

Sixth plan 1980-85 5.2 5.54

Seventh plan 1985-90 5.0 6.02

Eight plan 1992-97 5.6 6.68

Ninth Plan 1997-02 6.5 5.55

Tenth plan 2002-07 8.0 7.8

Eleventh plan 2007-12 9.0 7.9

Twelfth plan 2012-17 9.0 -

15-05-2013

Growth Rate (in %)

• Accelerate GDP growth from 8% to 10% • Increase agricultural GDP growth rate to 4% • Create 70 million new work opportunities.• Increase literacy rate for persons of age 7

years or above to 85%• Target growth: 9% ; Growth achieved:7.9%

11th Five Year Plan Highlights

• The government on 4th October approved the 12th five year plan (2012-17) that set average growth target at 8.2 percent.

• The theme of the Approach Paper is

“Faster, Sustainable and more inclusive

growth” .

15-05-2013 10

12th Five Year Plan

Twelfth Plan Objectives

• Basic objective : Faster, More Inclusive, and Sustainable Growth.

• Could aim at 9.0 to 9.5 percent• For growth to be more inclusive we need: Better

performance in agriculture• Faster creation of jobs, especially in manufacturing• Stronger efforts at health, education and

Infrastructure. • Special plans for disadvantaged/backward regions

Based on an intensive process within the Commission, following "Twelve Strategy Challenges" have been identified1. Enhancing the Capacity for Growth2. Enhancing Skills and Faster Generation of

Employment3. Managing the Environment4. Markets for Efficiency and Inclusion5. Decentralization, Empowerment and Information6. Technology and Innovation

Strategic Challenges

7. Securing the Energy Future for India8. Accelerated Development of Transport Infrastructure9. Rural Transformation and Sustained Growth of Agriculture10. Managing Urbanization11. Improved Access to Quality Education12. Better Preventive and Curative Health Care

Strategic Challenges

12th Five Year Plan :

Sectors

Sector wise Growth Targets

Sl.No. Sectors 11th FYP (achieved) (in %) 12th FYP (in %)1 Agriculture, Forestry & Fishing 3.7 4.02 Mining 4.7 8.03 Manufacturing 7.7 9.84 Elect. Gas & Water Supply 6.4 8.55 Construction 7.8 10.06 Trade, Hotels & Restaurant+

Transport, Storage & Communication9.9 11.0

7

8 Financing, Insurance, Real Estate & Business services

10.7 10.0

9 Community, Social & Personal Services

9.4 8.0

11 Industry 7.4 9.612 Services 10.0 10.0

Growth Rate Targets

Agriculture

• Target at least 4% growth for agriculture. • Cereals are on target for 1.5 to 2% growth. • Land and water are the critical constraints. Technology must focus

on land productivity and water use efficiency. • Farmers need better functioning markets for both outputs and

inputs. Also, better rural infrastructure, including storage and food processing

• States must act to modify APMC Act/Rules, modernize land records and enable properly recorded land lease markets .

Industry

• Investment and capacity additions are critical for sustained industrial growth.• Need to grow at 11-12% per year to create 2 million

additional jobs per year. Growth in 11th Plan is in 8%. • Indian industry must develop greater domestic value

addition.• Tune-up FDI and trade policies to attract quality

investment in critical areas.• Improve business regulatory framework: ‘cost of doing

business’, transparency, incentives for R&D, innovation etc.

• Better consultation and co-ordination in industrial policy making

Industry

• Some sectors should be given special attention because they contribute most to our objectivese.g. Create large employment: textiles and garments, leather and footwear; gems and jewellery; food processing industries

• Deepen technological capabilities:– Machine tools; IT hardware and electronics

• Provide strategic security:– telecom equipment; aerospace; shipping; defence equipment

• Capital equipment for infrastructure growth:– Heavy electrical equipment; Heavy transport and earth-moving

equipment• Sectoral plans are being prepared for each of the above with

involvement of industry associations and the concerned Ministries

Education and Skill

Development

• Must aim at universalisation of secondary education by 2017• Must aim at raising the Gross Enrolment Ratio (GER) in Higher

Education to 20 percent by 2017 and 25 percent by 2022• Must focus on quality of education. Must invest in faculty

development and teachers’ training• Must aim at significant reduction in social, gender and

regional gaps in education. Targets to be set for this purpose• Research and innovation in higher education must be

encouraged with cross-linkages between institutions and industry

Health

• Better health is not only about curative care, but about better prevention, Clean drinking water, sanitation and better nutrition, childcare, etc. Convergence of schemes across Ministries is needed.

• Expenditure on health by Centre and States to increase from 1.3% of GDP to at least 2.0%, and perhaps 2.5% of GDP by end of 12th Plan

• Desperate shortage of medical personnel. Need targeted approach to increase seats in medical colleges, nursing colleges and other licensed health professionals

• Health insurance cover should be expanded to all disadvantaged groups

• Focus on women and children; ICDS needs to be revamped

Energy

• Commercial energy demand will increase at 7% p.a. if GDP grows at 9%. This will require a major supply side response and also demand management

• Energy pricing is a major issue. Petroleum and Coal prices are significantly below world prices and world prices are unlikely to soften.

1. Power Sector Issues

• We must set a target of 100,000 MW capacity in 12th Plan (against achievement of 50,000 MW in Eleventh Plan)

• Coal availability will be a major constraint• Hydro-power development seriously hindered by

forest and environment clearance procedures. Himalayan States complain strongly.

• Electricity tariffs not being revised to reflect rising costs. Regulators are being held back from allowing justified tariff increases.

2. Other Energy Sources

• Nuclear power programme must continue with necessary safety review.

• Solar Mission is seriously underfunded.• Need longer term energy solution for cooking in

rural areas. Expand LPG network (with cash subsidy for the deserving, not subsidized prices). Also use off grid solar and bio-mass energy

• Wind power development, including off shore wind power, needs to be encouraged

Energy: Targets

Urban Development

• India’s urban population is expected to increase from 400 million in 2011 to about 600 million or more by 2030

• Critical challenges are basic urban services especially for the poor: water, sewerage, sanitation, solid waste management, affordable housing, public transport

• Investment required in urban infrastructure is estimated at `60 lakh crore over the next 20 years

• We need to develop and propagate innovative ways of municipal financing, through Public-Private Partnerships (PPPs)

• Land management strategies key for good urban development as well as financing urban infrastructure development

Infrastructure

• Railways’ Western and Eastern Dedicated Freight Corridors must be completed by the end of the Twelfth Plan

• High Speed Rail link between Delhi-Mumbai and Delhi-Kolkata in the Twelfth Five Year Plan

• Complete the linkages between the ports and the existing road and rail network. Need to deepen existing ports. Increase bulk/container capacity

• Ensure sufficient provision for maintenance of the already-built roads• Invest in unified tolling and better safety on highways • Improve bus services/public transport in smaller cities, towns and

districts.

12th Five Year Plan:Sectoral Contribution in GDP

Compared to 11th Plan (2007-2012)

Resource Allocation Priorities in 12th Plan

• Health and Education received less than projected in Eleventh Plan. Allocations for these sectors have increased in 12th Plan

• Health, Education and Skill Development together in the Centre’s Plan have increased by 1.2 percent point of GDP

• Infrastructure, including irrigation and watershed management and urban infrastructure, will need additional 0.7 percentage point of GDP over the next 4 years

• Use of PPP must be encouraged, including in the social sector, i.e. health and education. Efforts on this front need to be intensified