Download Five year Plans of India

th
12
Five Year Plan of India
Prepared by
Gourav Kumar Vani
PALB 2103
Economic Planning
• Process in which the limited natural resources
are used skillfully so as to achieve the desired
goals.
• The concept of economic planning in India, is
derived from Russia.
• 1947- committee on economic planning
constituted under chairmanship of Pundit J. L.
Nehru, which suggested Planning Commission
.
Source: Modern Economic Theory by K.K. Dewitt
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2
•March,1950-Planning commission was constituted.
•Planning commission is a non constitutional and advisory corporation. The Indian
constitution do not provide for the formation of planning commission.
Table No.1
Five year plan
Period
Target growth rate of
GDP (%)
Achievement Model
(%)
First plan
1951-56
2.1
3.6
Herod Domor
Model
Second plan
1956-61
4.5
4.21
Prof. P.C.
Mahalanobis
Third plan
1961-66
5.6
2.72
Sukhomy
Chakraborty and
Prof. Saddy
Fourth plan
1969-74
5.7
2.05
Ashok Rudra and
Alon S. Manney
Fifth plan
1974-79
4.4
4.83
Investment model
of planning
commission
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3
Table No. 2
Five year plan
Period
Target growth rate of
GDP (%)
Achievement
(%)
Model
Sixth plan
1980-85
5.2
5.54
Based on
investment
Yojana
Seventh plan
1985-90
5.0
6.02
Pranab
Mukharji
Eight plan
1992-97
5.6
6.68
John W. Miller
Model
Ninth Plan
1997-02
6.5
5.55
Planning
commission
Tenth plan
2002-07
8.0
7.8
Planning
commission
Eleventh plan
2007-12
9.0
7.9
Prof. C.
Rangarajan
Twelfth plan
2012-17
9.0
-
Planning
Commission
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4
Table No. 3
Five year
plan
% outlay on Theme or title
agriculture
Agricultural
growth rate
Industrial
growth rate
I
31
Agriculture
5.2
6.5(7)
II
20
Rapid Industrialization
3.9
7.3(10.5)
III
21
Self sustaining
growth(take off stage)
-2.0
8.2(11)
IV
23
Growth with stability and
progress towards self
reliance
2.8
4.2(12)
V
22
Poverty eradication and
attainment of self
reliance
5.4
6.2(8)
VI
24
Achieving economic and
technological self
sufficiency
6.3
6.4(8)
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Table No.4
Five year
plan
% outlay on
agriculture
Theme or title
Agricultural
growth rate
Industrial
growth rate
VII
22
Growth, Modernization, SelfReliance and Social Justice.
3.5
8.5(8.7)
VIII
21
Development of Human
Resource
3.4
7.4(7.3)
IX
20.5
Growth with social justice
and equity
2.5
5(8.2)
X
20
Growth with equity and
distributive justice
2.4
8.74(8.90)
XI
18.5
Towards faster and more
inclusive growth
3.7
6.66
XII
3.6
Faster, more inclusive and
sustainable growth
-
-
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12th Five Year Plan
•
The government on 4th October approved the 12th five year plan (2012-17)
document that seeks to achieve annual average economic growth rate of 8.2 per
cent, down from 9 per cent envisaged earlier, in view of fragile global recovery.
The theme of the Approach Paper is “faster, sustainable and more inclusive
growth” .According to officials the projected average rate gross capital formation
in the 12th Plan is 37 per cent of GDP. The projected gross domestic savings rate is
34.2 per cent of GDP and the net external financing needed for macro economic
balance has been placed at 2.9 per cent of GDP. During the 11th Plan (2007-12),
India has recorded an average economic growth rate of 7.9 per cent. This,
however, is lower than the 9 per cent targeted in 11th Plan. Besides other things,
the 12th Plan seeks to achieve 4 per cent agriculture sector growth during 201217. The growth target for manufacturing sector has been pegged at 10 percent.
The total plan size has been estimated at Rs.47.7 lakh crore, 135 per cent more
that for the 11th Plan (2007-12).
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TWELFTH FIVE YEAR PLAN: GROWTH RATE TARGETS
Table No. 5
Sl.No.
Sectors
11th FYP (achieved) (in %) 12th FYP (in %)
1
Agriculture, Forestry & Fishing
3.7
4.0
2
Mining & Quarrying
4.7
8.0
3
Manufacturing
7.7
9.8
4
Elect. Gas & Water Supply
6.4
8.5
5
Construction
7.8
10.0
6
Trade, Hotels & Restaurant+
Transport, Storage & Communication
9.9
11.0
8
Financing, Insurance, Real Estate &
Business services
10.7
10.0
9
Community, Social & Personal
Services
9.4
8.0
10
Total GDP
8.2
9.0
11
Industry
7.4
9.6
12
Services
10.0
10.0
7
15-05-2013
Source: 12th plan Approach paper, Planning Commission of India.
8
Targets (in %)for Broad Macro Economic Parameters
Table No. 6
Economic Parameters
11th Plan
1
Investment rate (GCF)
36.4
38.7
2
Fixed Investment of which
30.9
33.5
1. Household sector
11.6
12.0
2. Pvt. Corporate sector
11.0
12.4
3. Public Sector
8.3
9.1
Savings rate of which
34.0
36.2
1. Household sector
23.2
24.0
2. Pvt. Corporate Sector
8.2
8.5
3. Public savings of which
2.5
3.7
A. Govt. Admin.
-1.3
-0.5
B. Public Enterprises
3.8
4.0
Current Account Balance of which
-2.4
-2.5
1. Trade Balance
-5.0
-4.5
2. Capital Account Balance
3.8
5.0
WPI inflation rate
6.0
4.5-5.0
Serial .No.
3
4.
5.
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12th Plan
9
Indian Fiscal System
Capital Budget
Revenue Budget
Current revenue
or revenue
receipts
Tax
Revenue
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Non Tax
Revenue
( fees, grants,
fines,
penalties etc)
Current
expenditure or
revenue
expenditure
Capital
receipts
Capital
expenditure
Expenditure on
infrastructure,
technology , new
capital assets and
loans & grants etc
Expenditure on
Administration
,judiciary, Welfare
Programmes and
Transfer Payments
Non Debt
Receipts
Receipts
from Debts
10
Expenditure of
Central Govt.
Plan
Expenditure
(agriculture,
rural
development, irrigation and flood control, energy,
industry and minerals, transport, communications,
Science and Technology, Environment and Economic
Services etc )
Non-Plan Expenditure(Interest
payments, defense,
subsidies, police, pensions, economic services, loans to public
enterprises and loans as well as grants to state governments,
union territory governments and foreign governments.)
 Plan Expenditure includes both revenue and capital expenditure
of the government on the Central Plan, Central assistance to state and
union territory plans. It forms a sizeable proportion of the total
expenditure of the Central government.
Expenditure of
State Govt.
Development Expenditure
Non-Development Expenditure
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Some concepts needed
1. Gross Budgetary Support (GBS)
• The Gross Budgetary Support (GBS) is an
important component of the Central Plan of the
Government of India.
• The Government's support to the Central plan is
called the Gross Budgetary Support. The GBS
includes the tax receipts and other sources of
revenue raised by the .The share of the GBS in
Central Plan has been rising since 2008-09.
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2. Central Plan
• It consists of the Government's budget
support to the Plan and the internal and extra
budgetary resources raised by public
enterprises.
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3.Fiscal Deficit
• The fiscal deficit is the difference between the
government's total expenditure and its total
receipts (excluding borrowing).
• The fiscal deficit can be financed by borrowing
from the Reserve Bank of India (which is also
called deficit financing or money creation) and
market borrowing (from the money market, that
is mainly from banks).
• Primary Deficit: Fiscal Deficit- interest payments,
it shows how much is government borrowing to
pay for expenses other than interest payments.
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4. IEBR
Internal and Extra Budgetary Resource
• IEBR is an important part of the Central plan
of the Government of India and constitutes
the resources raised by the PSUs through
profits, loans and equity.
• Expenditure is not same as Payments in
Accounting. We can make expenditure even
without paying for the goods and/or services
we use i.e., on credit basis.
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5. Revenue Deficit
• It refers to the excess of revenue expenditure over revenue receipts.
• Revenue Expenditure: It is meant for the normal running of
government departments and various services, interest charges on debt
incurred by the government and subsidies. Broadly speaking,
expenditure which does not result in creation of assets is treated as
revenue expenditure. All grants given to state governments and other
parties are also treated as revenue expenditure even though some of the
grants may be for creation of assets.
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Projection of Centre’s Resources for 12th Five Year Plan
Table No. 7 ( values in Rs. Lakh Crore & in parenthesis as % of GDP)
Description
2011-12
( base
year )
201213
201314
201415
1
Tax Revenue
net to centre
6.6 4
(7.40)
8.37
(8.14)
10.04
(8.53)
11.75
(8.72)
13.63
(8.83)
15.74
(8.91)
59.55
(8.68)
2
Non tax
revenue
1.25
(1.40)
1.12
(1.10)
1.28
(1.09)
1.46
(1.09)
1.51
(0.98)
1.5
(0.88)
6.94
(1.01)
3
Non debt
capital
receipts
0.55
(0.60)
0.56
(0.54)
0.54
(0.46)
0.551
(0.41)
0.559
(0.36)
0.567
(0.32)
2.78
(0.41)
4
Fiscal deficit
4.128
(4.60)
4.216
(4.10)
4.120
(4.35)
4.04
(3.30)
4.63
(3.30)
5.30
(3.0)
22.31
(3.25)
5
Aggregate
resources(1+
2+3+4+5)
12.57
(14.00)
14.27 15.99
17.81
(13.88) (13.59) (13.21)
20.43
(13.18)
23.17
(13.11)
91.60
(13.34)
15-05-2013
2015-16 2016-17
12th
Plan
total
Sl.No
.
Source: 12th plan Approach paper, Planning Commission of India.
17
Continued…….
Table No.8 (values
in Rs. Lakh Crore & in parenthesis as %of GDP)
Sl.N Description
o.
201112
( base
year )
201213
201314
201415
201516
201617
12th
plan
total
6
Non plan
expenditure
8.16
(9.09)
9.21
(8.96)
10.16
(8.63)
11.09
(8.23)
12.08
(7.83)
13.00
(7.36)
55.56
(8.09)
7
Gross budgetary
support for plan
4.41
(4.92)
5.06
(4.92)
5.83
(4.95)
6.71
(4.98)
8.25
(5.35)
10.16
(5.75)
36.03
(5.25)
7a
Central Assistance
to states or union
territories
1.06
(1.18)
1.21
(1.18)
1.40
(1.19)
1.61
(1.20)
1.91
(1.25)
2.30
(1.30)
8.45
(1.23)
7b
Central Plan
3.35
(3.74)
3.84
(3.74)
4.43
(3.76)
5.10
(3,78)
6.33
(4.10)
7.86
(4.45)
27.57
(4.02)
8
IEBR
2.56
(2.86)
2.93
(2.86)
3.35
(2.85)
3.83
(2.84)
4.38
(2.84)
5.00
(2.83)
19.52
(2.84)
9
Plan resources for
centre
5.92
(6.60)
6.78
(6.59)
7.78
(6.61)
8.93
(6.63)
10.71
(6.94)
12.87
(7.28)
47.09
(6.86)
89.80
102.8
3
117.74
134.81
154.3
6
176.7
4
686.4
9
1015-05-2013
Gross domestic
product
18
Incremental Capital Output Ratio
(ICOR)
• Efficiency in resource use captured through the ICOR (incremental
capital output ratio) deteriorated significantly during the 11th Plan.
Compared to an ICOR of 4.1 for the 10th Plan, the 11th Plan
achieved an ICOR of 4.5, indicating erosion in resource use
efficiency. The 12th Plan does not explicitly mention the likely ICOR.
However, the ICOR can be derived implicitly from the ratio of fixed
investment plus stocks as per cent of GDP to the growth rate. The
12th Plan projects an average fixed investment rate of 34 per cent
and stocks at 3.5 per cent of GDP.
•
The projected investments juxtaposed with the projected growth
rate in the best case scenario yields an ICOR of 4.6 for the 12th
Plan. Thus, the macroeconomic framework suggests a further
deterioration in resource use efficiency in the 12th Plan even in the
best case scenario.
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Source: http://www.thehindubusinessline.com/opinion/thegrowth-euphoria-is-over/article4241907.ece
19
• 12th plan envisage Universalisation
Secondary Education by 2017.
of
• In 11th plan, the total public spending on
health (combined of state and centre) was less
than 1% of GDP. 12th plan aims to increase it to
2.5% of GDP by the end of 12th plan.
• India has evolved National Action Plan for
Climate Change with eight component
mission. 12th plan considers it for
implementation to achieve target of 20% to
25%reduction in emission intensity of GDP
over 2005 levels by 2020.
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• IMR (infant mortality rate) was 47 in 2010
and 12th plan aims to bring it down to 25
per 1000 live birth by the end of plan
period.
• 12th plan aims to bring down MMR (
maternal mortality rate) to 1 per 1000 live
birth by the end of plan period.
• Not even single Indian university figures in
list of top 200 universities in the
world.12th plan aims to get 5 Indian
university in the list.
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• Even after 65 years of Independence, we have 45% of
households do not have electricity connections.
• 11th plan added 55,000 MW of generation capacity which was
short of target set and 12th plan envisages to add 88,000 MW
by the end of plan period.
• 12th plan envisages to add 30,000 MW of renewable energy
capacity.
• 12th plan envisages to electrify all the villages and to reduce
AT & C losses to 20% by the end of 12th plan.
• The total investment in infrastructure in 12th plan is estimated
to be Rs. 55.7 lakh crore ,which works out to be $1trillion at
prevailing exchange rates.
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• The share of private investment in total
investment in infrastructure rose from 22% in
Tenth Plan to 36.6% in 11th Plan. it will have
to increase to 48% in 12th plan to meet
infrastructure investment target.
• More than 40% of household avail no
banking facility at all in country. insurance
premia account for less than 1% of GDP,
which is just one third of international
average.
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• We have capacity to treat only 30% of
human waste we generate.
• Just two cities, Delhi and Mumbai, which
generate 17% of country’s urban sewage
have about 40% of total installed capacity.
• 12th plan envisages that no water scheme
in urban Indian will be sanctioned without
integrated scheme for sewage treatment.
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• Every state in 12th plan must have an average
growth rate preferably higher than achieved in
11th plan.
• Head count ratio of consumption poverty is to
be reduced by 10% points over the preceding
estimates by the end of this plan.
• Generate 50 million new job opportunities in
non-farm sector and provide skill certification
to equivalent no. during 12th plan period.
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• Mean year of schooling to increase to 7 years
by the end of 12th plan.
• Enhanced access to higher education by
creation of 2 million additional seats cohort
aligned to the skill needs of economy.
• Eliminate gender and social gap in school
enrolment by the end of 12th plan .
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•Improve child sex ratio (0-6) to 950 by the end of
12th plan.
•Reduce fertility rate to 2.1 by the end of 12th plan.
•Reduce under nutrition among children aged 0-3
to half of the NFHS-3 level by the end of 12th plan.
•Increase investment in infrastructure to 9% of
GDP by the end of 12th plan.
•Increase Gross Irrigated area from 90 million
hectares to 103 million hectares by the end of 12th
plan.
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• Connect all villages with all-weather
road by the end of 12th plan.
• Upgrade national and state highways to
minimum two-lane standard by the end
of 12th plan.
• Complete
Eastern
and
Western
Dedicated Freight Corridor by the end of
12th plan.
• Increase rural tele-density to 70% by the
end of 12thplan. Currently it is 40.81%.
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• Ensure 50% of rural population has access
to 40 lpcd piped drinking water supply
and 50% of Gram Panchayat achieve
Nirmal Gram Status by the end of 12th
plan.
• Increase Green Cover (as measured by
Satellite Imagery)by 1 million hectare
every year during 12th plan period.
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References
•
•
•
•
•
•
•
•
•
•
Approach Paper 12th Five Year Plan, Planning Commission, Government of India
Banking, Public Finance and International Trade by D.M. Mithani, 2008 edition,
Himalaya Publishing House, New Delhi.
Facts of Indian Economy,2012,Unique Publishers, New Delhi.
Indian Economy At a Glance,2012,
New Vishal Learning Media, New Delhi.
Lucent’s General Knowledge Book, 2011.
Modern Economic Theory by K.K. Dewitt,2010 edition, S. Chand & Sons
Publishers, New Delhi.
Pratiyogita Darpan, Indian Economy 2012,Upkar Prakashan, Agra.
12th Five Year Plan Draft, Planning Commission, Government of India.
http://www.simplydecoded.com/2012/10/13/summary-of-approved-12th-fiveyear-plan/
http://www.thehindubusinessline.com/opinion/the-growth-euphoria-isover/article4241907.ece
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