Unit 5

Current Five Year Plan

Q1) Write a note on 12th five year plan.                                  

Q2) Sate Key highlights of 12th five year plan.

A) To Q1&2

From 1947 to 2017, the Indian economy was premised on the concept of planning. This was carried through the Five-Year Plans, developed, executed, and monitored by the Planning Commission (1951 - 2014) and the NITI Aayog (2015 - 2017). With the Prime Minister as the ex-officio Chairman, the commission has a nominated Deputy Chairman, who holds the rank of a Cabinet Minister. Montek Singh Ahluwalia is the last Deputy Chairman of the Commission (resigned on 26 May 2014). The new government led by Narendra Modi, elected in 2014, has announced the dissolution of the Planning Commission, and its replacement by a think tank called the NITI Aayog (an acronym for National Institution for Transforming India).

Twelfth Plan (2012–2017)

1)  The Twelfth Five-Year Plan of the Government of India has been decided to achieve a growth rate of 8.2% but the National Development Council (NDC) on 27 December 2012 approved a growth rate of 8% for the Twelfth Five-Year Plan. With the deteriorating global situation, the Deputy Chairman of the Planning Commission Montek Singh Ahluwalia has said that achieving an average growth rate of 9 percent in the next five years is not possible. The Final growth target has been set at 8% by the endorsement of the plan at the National Development Council meeting held in New Delhi. "It is not possible to think of an average of 9% [in the 12th plan]. I think somewhere between 8 and 8.5 per cent is feasible,” Ahluwalia said on the sidelines of a conference of State Planning Boards and departments. The approached paper for the 12th Plan, approved last year, talked about an annual average growth rate of 9%. He also indicated that soon he should share his views with other members of the Commission to choose a final number (economic growth target) to put before the country’s NDC for its approval.

2)  The government intends to reduce poverty by 10% during the 12th Five-Year Plan. Ahluwalia said, “We aim to reduce poverty estimates by 9% annually on a sustainable basis during the Plan period". Earlier, addressing a conference of State Planning Boards and Planning departments, he said the rate of decline in poverty doubled during the 11th Plan. The commission had said, while using the Tendulkar poverty line, the rate of reduction in the five years between 2004–05 and 2009–10, was about 1.5%points each year, which was twice that when compared to the period between 1993–95 to 2004–05. The plan aims towards the betterment of the infrastructural projects of the nation avoiding all types of bottlenecks. The document presented by the planning commission is aimed to attract private investments of up to US$1 trillion in the infrastructural growth in the 12th five-year plan, which will also ensure a reduction in the subsidy burden of the government to 1.5 per cent from 2 per cent of the GDP (gross domestic product). The UID (Unique Identification Number) will act as a platform for cash transfer of the subsidies in the plan.

3)  12th Five Year Plan 2012-17 as per the draft document released by the Planning Commission aims at a growth rate of 8%. This is the revised rate when compared to the initial approach paper.

4)  Other targets of the Twelfth Five Year Plan in different sectors are listed below. Vision of 12th five year plan (2012-17)

1. Twelfth Five Year Plan focuses on Growth – Growth which is-

2. Faster,

3. Inclusive,

4. Sustainable.

5. 25 Core Monitorable Targets of the 12th Five Year Plan (2012-17).

Q3) Write a short note on resource allocation of 12th five year plan.

A3) Prior to the Fourth Plan, the allocation of state resources was based on schematic patterns rather than a transparent and objective mechanism, which led to the adoption of the Gadgil formula in 1969. Revised versions of the formula have been used since then to determine the allocation of central assistance for state plans. The resource allocation for 12th five year plan are discussed under the following heads-

a)  Average economic growth of 14.8 per cent p.a.

b) Fiscal deficit to decline from 5.1 per cent of GDP in 2012-13 to 3.0 per cent in 2016-17.

c)  Net tax revenue increased from 7.6 per cent of GDP in 2012-13 to 8.79 per cent 2016-17.

d)  Subsidies to decline from 2.44 per cent of GDP in 2011-12(RE) to 1.5 per cent in 2016-17.

2.  Public sector resources

a)  GBS (gross budget support): 3568626 crore

b) CA to states and union territories plan: 857786 crore.

c)  IEBR of central public sector enterprises: 1622899 crore.

3.  Sectoral allocation of GBS (gross budget support)

a)  The GBS allocation of the centre to major sectors has been made in tune with the approach adopted for the 12th plan for “faster, sustainable and inclusive growth.”

b) The plan focuses on poverty reduction, ensuring access to basic physical infrastructure, health and educational facilities to all.

Biggest increase in allocation of centre’s GBS is provided for health and child development, Urban development and education.