Proper planning is necessary for overall progress and prosperity of a developing country like India to make it advanced.
A Planning Commission was setup in 1950 by a Resolution of the Government of India, which derived its objectives and spirit from the Directive Principles of State Policy enshrined in the Constitution and took responsibility of formulating the national plans taking on overall view of the needs and resources of the country and making assessments of their performance. The Planning Commission actually conceives every Five Year Plan with high expectations and hope that it would avoid the past mistakes and implement the new ideas in building a more prosperous India. With the same expectations it had submitted the 11th Five Year Plan Draft on November 9, 2007 and was cleared in a highly significant meeting presided by the Prime Minister Dr. Manmohan Singh and held at New Delhi.
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As the Chairman of the Planning Commission Dr. Manmohan Singh categorically expressed concern over the burgeoning oil and food subsides. In his speech, the Prime Minister pointed to the urgency of addressing “the problem of mounting subsidies in food, fertilizer and now in petroleum which is recent phenomenon’. According to Dr. Singh, himself a renewed economist and the key architect of liberalization, a whopping sum of over Rs. 1,00,000 crore is likely to be spent during the current financial year alone on these three items. Targeting a percent economic growth in this five year plan the kind of focus that has given to the development of agriculture sector in the approved document, the problem of rising subsidy in sectors primarily identified as some of the drivers of economic growth suggests a trend that is even more worrying. So to no one’s surprise, the Prime Minister in his characteristic posture of a keen and sensible observer of the situation, asked his Cabinet colleagues and the Commission to “reflect what these mean for our development options and what developments options these subsidies as shutting out”. He asked whether such large outgo on subsidies mean few schools, fewer hospitals, fewer scholarships, lower public investment in agriculture and poor infrastructure”.
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Dr. Singh also indicated in clear terms that the nation’s food security might come under stress in the next decade. “Global trends in food production and prices and our own demand pattern of consumption are going to put increasing pressure on both availability and prices of basic food items”, he said, adding the country needs to manage these pressures and ensure that out food planning adjusts to the emerging market realities”
The full Commission approved the draft the 11th Five Year Plan that began in April 2007 and aims at raising average GDP rate to 9 percent from 7.6 percent during 2002-2007, while more than doubling the outlay to Rs. 36,44,718 crore. The document seeks to make growth inclusive by increasing the outlay for priority sector programmes. Some of the important targets of the 11th Five Year Plan include reducing poverty by 10 percentage points, generating 7 crore new employment opportunities and ensuring electricity connection to all villages.
Of the total plan size, the Center’s gross budgetary support would be Rs. 14,00,000 crore. The Plan has also fixed certain important targets which include taking industrial and services sector growth to 9-11 percent and investment rate of 36.7 percent.
The Plan draft aims to reduce the level of poverty by 10 percentage points by way of generating 70 million new jobs during the five year period also ensure electricity connection to all villages. With various monitorable targets set for various priority programmes at the central and state level, the thrust of the Plan document is on social sectors, agriculture and rural development.
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The education sector is set to be a big beneficiary with the Plan document seeking to increase the allocation to 19.36 percent of the GBS from 7.68 percent in the Tenth Plan. In absolute terms, the Centre will be spending Rs. 2,75,000 crore on education during the 11th Plan as compared to Rs. 62,238 crore in the previous Plan. Already, the Government has drawn up a comprehensive plan to improve primary, secondary and higher education, including the setting up of new IITs, IIMs and colleges.
As the Prime Minister pointed out, the agricultural growth, having average of about four percent in the last two years, is likely to remain at the same level during the current fiscal also. Turning to the issue of more inclusive growth, the PM said that the high nine percent growth achieved during the first 4 years of UPA regime should not be restricted to “isolated pockets or to certain sections of society”. The growth process, he said, should be far more broad based and the Plan period must be maintained and the Government muse ensure that the deliver services of empowerment programmes were effective and free of leakages, he said.
The major thrust of the Plan is to be on social sector, including agriculture and rural development, with the draft document proposing to increase the priority sector allocation to 74,67 percent of the Center’s Gross Budgetary Support from 55,20% in the Tenth Plan. The Plan also proposes to raise investment on infrastructure sector including irrigation, drinking water and sewage from 5 percent of GDP in 2005-2006 to 9% by 2011-12. The non-priority sector, however, will received the same amount from the Central Government as was allocated to it in the 10th Plan and would have to fend for itself. The allocation towards the non-priority sector has been reduced to 25-33% of GBS from 44.88% in the 10th Plan.