Case Study on Challenges of 12th Five Year Plan

Question: When the whole world is in the brink of another recession, can the 12th five year plan show a remarkable change by following the above strategies to improve the economic growth of the country?

Submitted by: J Lokesh, Aniketh, Navaneeth

CHALLENGES OF 12TH FIVE YEAR PLAN

India gained independence; its economy was groveling in dust. The British had left the Indian economy crippled and the fathers of development formulated 5 years plan to develop the Indian economy. The five years plan in India is framed, executed and monitored by the Planning Commission of India. After the implementation of first five year plan proposed by Pandit Jawaharlal Nehru, the plan gave importance to agriculture, irrigation and power projects to decrease the countries reliance on food grain imports, resolve the food crisis and ease the raw material problem especially in jute and cotton. Nearly 45% of the resources were designated for agriculture, while industry got a modest 4.9%.The focus was to maximize the output from agriculture, which would then provide the impetus for industrial growth. In 1969 when the fourth plan was proposed, they realized that GDP growth and rapid growth of capital accumulation alone would not help improve standard of living or to become economically selfreliant. Importance was given to providing benefits to the marginalized section of the society through employment and education. The Janata government moved away from GNP approach to development, instead sought to achieve higher production targets with an aim to provide employment opportunities to the marginalized section of the society. But the plan lacked the political will. The Congress government on taking office in 1980 formulated a new plan with a strategy to lay equal focus on infrastructure and agriculture. When the tenth five year plan was proposed the aim was to make the Indian economy the fastest growing economy in the world, with a growth target of 10%.It wanted to bring in investor friendly market reforms and create a friendly environment for growth. It sought active participation by the private sector and increased FDI's in the financial sector and Emphasis was laid on corporate transparency and improving the infrastructure. Similarly the eleventh plan has the objective to increase GDP growth to 10%.

Even after 64 years of independence, India is still in the trance of a developing country. It is facing lot of problems and challenges, so the objective of the twelfth five year plan should focus on the following strategies: 1. Enhancing the Capacity for Growth Today, India can sustain a GDP growth of 8 percent a year. Increasing this to 9 or 10 percent will need more mobilization of investment resources; better allocation of these resources through more efficient capital markets; higher investment in infrastructure through both public and PPP routes; and more efficient use of public resources. 2. Enhancing Skills and Faster Generation of Employment It is believed that Indias economic growth is not generating enough jobs or livelihood opportunities. At the same time, many sectors face manpower shortages. To address both, we need to improve our education and training systems; create efficient and accessible labor markets for all skill categories; and encourage the faster growth of small and micro enterprises. 3. Managing the Environment Environmental and ecological degradation has serious global and local implications, especially for the most vulnerable citizens of our country. How can we encourage responsible behavior, without compromising on our developmental needs? 4. Markets for Efficiency and Inclusion Open, integrated, and well-regulated markets for land, labor, and capital and for goods and services are essential for growth, inclusion, and sustainability. We have many sectors were markets are non-existent or incomplete, especially those which are dominated by public provisioning. How do we create or improve markets in all sectors? 5.Decentralisation, Empowerment and Information Greater and more informed participation of all citizens in decision-making, enforcing accountability, exercising their rights and entitlements; and determining the course of their lives is central to faster growth, inclusion, and sustainability. How can we best promote the capabilities of all Indians, especially the most disadvantaged, to achieve this end?

6. Technology and Innovation Technological and organizational innovation is the key to higher productivity and competitiveness. How can we encourage and incentivize innovation and their diffusion in academia and government as well as in enterprises of all sizes. 7. Securing the Energy Future for India Faster and more inclusive growth will require a rapid increase in energy consumption. Since we have limited domestic resources, how can we meet this need equitably and affordably without compromising on our environment? 8. Accelerated Development of Transport Infrastructure Our inadequate transport infrastructure results in lower efficiency and productivity; higher transaction costs; and insufficient access to our large national market. How can we create an efficient and widespread multi-modal transport network. 9. Rural Transformation and Sustained Growth of Agriculture Rural India suffers from poor infrastructure and inadequate amenities. Low agricultural growth perpetuates food and nutritional insecurities, which also reduces rural incomes. How can we encourage and support our villages in improving their living and livelihood conditions in innovative ways? 10. Managing Urbanization Most of our metros and cities are under severe stress with inadequate social and physical infrastructure coupled with worsening pollution. Migration pressures are likely to increase. How do we make our cities more livable? What can we do today to ensure that smaller cities and towns are not similarly overwhelmed tomorrow? 11. Improved Access to Quality Education Educational and training facilities have been increasing rapidly. However, access, affordability, and quality remain serious concerns. Employability is also an issue. How can we improve the quality and the utility of our education, while ensuring equity and affordability?

12. Better Preventive and Curative Health Care Indias health indicators are not improving as fast as other socio-economic indicators. Good healthcare is perceived to be either unavailable or unaffordable. How can we improve healthcare conditions, both curative and preventive, especially relating to women and children?

Question: When the whole world is in the brink of another recession, can the 12th five year plan show a remarkable change by following the above strategies to improve the economic growth of the country? India has a very strong banking regulations system, so India wont be affected by the recession but still, if the 12th five year plan does not focus on the above said strategies then it will be a tough time for the Indian government and the people if there is a recession. Quality education, proper infrastructure, health care, employment, technology and innovation are the key areas for attracting foreign investors. If it fails to attract foreign investors, India might face the brunt of recession in a different way. For example, if the 12th five year plan doesnt focus on technology and innovation, the outsourcing companies might have trouble in getting business from American companies as Obama has said in a recent interview that he will take back all the software jobs outsourced to India. This will affect the Indian BPO companies as well as our economy.