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The issues are: 1. Eleventh Plan Experience 2. Objectives of the Twelfth Plan 3. Agriculture and Rural Development 4. Industry 5. Education and Skill Development 6. Health 7. Infrastructure Development 8. Power Sector and Energy 9. Implementation, Accountability and Governance.
Issue # 1. Eleventh Plan Experience:
As compared to the Tenth Plan average GDP growth rate of 7.5 per cent, the GDP growth is likely to average 7.74 per cent over Eleventh Plan, which is short of the 9 per cent target, but considered remarkable given to the global crisis and drought.
The country has attained progress on inclusiveness in respect of agricultural growth, poverty reduction, education, health, upliftment of SCs/STs, minorities etc. However, progress on inclusiveness is less than expected. Thus the country is likely to miss Millennium Development Goals (MDG), except perhaps on poverty.
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Inflation has accelerated in the last two years. Current international environment is very uncertain. There are global pressure on food, oil and other commodity prices. Financial conditions and exchange rates are likely to be volatile.
Issue # 2. Objectives of the Twelfth Plan:
Basic Objective:
The basic objective of the Twelfth Plan is to attain faster, more inclusive and sustainable growth. The Twelfth Plan aims to achieve between 9.0 to 9.5 per cent growth in its economy.
Energy, water and environment present major sectoral challenges for the country. The plan wants to address them without sacrificing growth.
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The plan aims at finding adequate resources to create a world class infrastructure.
In order to make our growth more inclusive we need:
(i) Better performance in agriculture,
(ii) Faster creation of jobs, especially in manufacturing
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(iii) Stronger efforts at health, education and skill development;
(iv) Improve effectiveness of programmes directly aimed at the poor;
(v) Special programme for socially vulnerable groups; and
(vi) Special plans for disadvantaged and backward regions.
Issue # 3. Agriculture and Rural Development:
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The Twelfth Plan wants to put much importance on the development of agriculture and rural development. India should aim for at least 4 per cent growth in agriculture production during the Twelfth Plan period with focus in non-cereals food items including milk and fishery. Accordingly, the Twelfth Plan set target to attain at least 4 per cent growth for agriculture.
Cereals are on target for attaining 1.5 per cent to 2 per cent growth. Plan decided to concentrate more on other foods and on animal husbandry and fisheries where feasible. As land and water are the critical constraints thus technology must focus on land productivity and water use efficiency. Farmers need better functioning markets for both inputs and outputs.
Also they require better rural infrastructure, including storage and food processing.
The presentations emphasized that the status need to amend Agriculture Produce Marketing Committee (APMC) Act for providing better market to farmers, modernism land records and enable properly recorded land lease markets. Rastriya Krishi Vikas Yojana (RKVY) has helped convergence and innovation and gives State governments flexibility in operationalizing it. Twelfth Plan aims to expand RKVY.
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The commission suggested that the UPA’s flagship scheme Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) should be redesigned to increase contribution to land productivity and rain-fed agriculture. FRA has potential to improve forest economics and tribal societies. But convergence with NRLM required for enduring livelihoods.
In respect of AIBP, it is not achieving its objectives. Thus AIBP must be restructured to incentivize irrigation reform and efficiency of resource use. Setting of Water Regulatory Authority must be a precondition. There is also a strong case for higher priority to watershed management.
Since agriculture is a State subject, the Centre will have to work actively hand in hand with the States to bring coherence in policies and strategies. It is observed that the overall investment in agriculture, which had dipped to less than 10.0 per cent of agri-GDP in 2002-03 has been raised substantially in the mean time and today it stands more than 21.0 per cent of agri-GDP.
Higher levels of investments in agriculture, both by the public and private sector can yield much better results if the reforms are undertaken to stream line not only the incentive structures for the farmers, but also the institutional framework in which agriculture and allied activities take place. Seeds and irrigation are priority areas, which can be catalysts for raising productivity on the supply side.
On the demand side, there is also a urgent need to remove most of the controls that have denied a unified and seamless all India market for most of the agri-products. The Approach paper observes that finding the most effective ways of ushering in these changes must be a key priority area in the Twelfth Plan.
Issue # 4. Industry:
The Planning Commission presentation observed that manufacturing industry is Showing Weak performance as the growth rate in industry during the Eleventh Plan is around 8 per cent. At present there is need to grow at 11-12 per cent per year to create 2 million additional jobs per year. Indian industry must develop greater domestic value addition and more technological depth to cater to growing domestic demands and improve trade balance.
The presentation wanted to turn up FDI and trade policies to attract quality investment in critical areas during the Twelfth Plan. It also wanted to improve business regulatory framework. Considering the land and infrastructure constraints, the plan presentation at the NDC meeting asked the states to develop ‘special industrial zones’ with good connectivity and infrastructure.
It also mentioned that ‘Clusters’ need to be supported to enhance productivity of MSMEs and also suggest to adopt better consultation and coordination in industrial policy making.
The document also mentioned that some industrial sectors should be given special attention because they contribute most to our objectives i.e:
(i) Creating large employment:
Textiles and garments, leather and footwear, gems and jewelry, food processing industries;
(ii) Deepening technological capabilities:
Machine tools, IT hardware and electronics;
(iii) Provide strategic security:
Telecom equipment, aerospace, shipping, defence equipment;
(iv) Providing capital equipment for infrastructure growth:
Heavy electrical equipment, heavy transport and earth moving equipment;
(v) Sector with global competitive advantage:
Automotive, pharmaceuticals and medical equipment’s;
(vi) MSMEs:
Innovation, employment and enterprise generation.
Accordingly sectoral plans are being prepared for each of the above with involvement of industry association and the concerned Ministries.
Issue # 5. Education and Skill Development:
In respect of education and skill development, the Commission in its presentation to NDC aims at universalisation of secondary education by 2017. It must aim at raising the Gross Enrolment Ratio (GER) in higher education to 20 per cent by 2017 and 25 per cent by 2022.
The Commission in its Twelfth Plan presentation wants to focus on quality of education (Eleventh Plan’s emphasis was on quantity). Thus the plan must invest in faculty development and teacher’s training. The plan must aim at significant reduction in social gender and regional gaps in education. Targets are to be set for this purpose.
In respect of major curriculum reforms, stress is given on vocational skill development for ensuring employability in response to changing market needs. It also proposed development and operationalization of PPP models the needs of a fast growing economy. It also encouraged research and innovation in higher education with cross-linkages between institution and industry.
There has been improvement in the extension of primary education, both in regard to enrolment and also in reducing drop-out rates. The Right to Education (RTE) Act, which become operational in 2009 has laid a solid foundation on which we need to build.
A major achievement is that most children are now in school. We now confront the greater challenge of improving the quality of school education. This means extensive and improved teacher training upgrading curriculum and enforcing of accountability in teachers’ attendance.
As increasing number of children finish elementary school there will be need to expand capacity in secondary and higher secondary schools. Thus envisaging universalisation of secondary education by 2017 should be a priority in the Twelfth Plan.
The task of achieving excellence in higher education demands academic reforms to provide greater flexibility and choice for the students and strengthening research activity in universities by establishing mutually-reinforcing linkages between teaching and research.
Resource constraints will make it difficult to meet the need of expanding higher education entirely through the public sector. Thus private initiatives in higher education, including viable and innovative PPP-models will therefore, be actively promoted.
Issue # 6. Health:
The commission in its 12th plan presentation observed that better health does not mean only curative care but also about better prevention which needs clean drinking water, sanitation, better nutrition, child care etc. Thus convergence of schemes across Ministries is needed.
The commission proposed that expenditure on health by Center and States will increase from 1.3 per cent of GDP to at least 2.0 per cent and perhaps 2.5 per cent of GDP by the end of Twelfth Plan. The plan proposed to improve quality of NRHM services. It also proposed to expand the health insurance cover to all disadvantaged groups.
Regardless, a larger allocation of resources will definitely be needed in the Twelfth Plan to achieve the objective. We should thus aim to increase total health expenditure as percentage of GDP to 2.5 per cent by the end of Twelfth Plan.
Moreover, it must be emphasised that financial resources are not the only constraint. Shortage of health professionals at all levels has become serious impediment for achieving an expansion in the public provision of health services. There has been inadequate attention to improving our education and training capacities in this area.
There are also problems of accountability of personnel even when these professionals are recruited. This lacunae will take some time to rectify. However, the Twelfth Plan must give a special emphasis to solved this problem.
Issue # 7. Infrastructure Development:
The Twelfth Plan must continue the thrust on accelerating the pace of investment in infrastructure, as it is considered critical for sustaining and accelerating growth. Public investment in infrastructure will have to bear a large part of infrastructure needs in backward and remote areas for expanding connectivity and expanding the much needed public services.
Since resource constraints will continue to limit public investment in infrastructure and other areas, PPP-based development needs to be encouraged wherever feasible. It is necessary to review the factors which may be constraining private investment and take steps to rectify them.
Issue # 8. Power Sector and Energy:
The commission set a target of raising 100,000 MW capacity of the power sector during Twelfth Plan as compared to that of achievement of 50,000 MW during the Eleventh Plan. Considering the shortage of coal produced in India, Coal India must become a coal supplier and not just a mining company. The Commission feels that Coal India should plan to import coal to meet the coal demands.
This requires blending of imported and domestic coal as supplied by coal India. In respect of petroleum and natural gas the Commission feels that there is need for further expansion of new NELP blocks during the Twelfth Plan. Stable and clearer production sharing contracts will incentivize exploration and encourage investment.
Moreover, pipeline network for transportation of natural gas LNG is limited which need quick expansion during the plan for its optimal use. Moreover nuclear programme must continue with necessary safety review during the Twelfth Plan.
Attempts will also be made to develop non-conventional sources of energy like solar energy, wind power and tidal power. Moreover, the Commission observed that expansion in supply will need to be supported by demand side management through rational energy pricing and maintaining energy standards for high energy consuming industry, electrical appliances etc.
Rational energy pricing is critical for both effective demand management and a healthy supply response. The Twelfth Plan must address the challenge of aligning domestic energy prices with global price trends. This is not easy to do in a short time span, but it can be done gradually over a period of time.
It must be emphasized that our ability to sustain high growth in the Twelfth Plan will depend critically upon our ability to sustain high growth in the Twelfth Plan will depend critically upon our ability to make this adjustment. The poor will need subsidy, which could be appropriately targeted, but energy prices, in general, cannot be delinked from global price levels, particularly in a situation when import dependence in increasing.
Issue # 9. Implementation, Accountability and Governance:
Ensuring better implementation and improved accountability are important challenges that requires greater attention in the Twelfth Plan. There are four aspects of governance that are considered important.
First, better governance is very crucial for translating the large amount of outlay of our flagship programmes into enduring outcomes on the ground. Implementation of programmes can be improved through a multi-faceted approach relying on professionalization on public service delivery, Total Quality Management, innovative use of IT and other technologies which improve monitoring and supervision and also with greater emphasis on social mobilisation and capacity building and building deeper partnerships with civil society organisations.
Second, implementation of infrastructural development projects in many areas, especially large projects, is held up for a variety of reasons. Lack of coordination among different implementation agencies can lead to long delays and cost overruns. To get better returns from public investment in infrastructure and in social sectors, project management capabilities must be improved.
A nation-wide drive to improve project implementation must be made an integral part of the Twelfth Five Year Plan.
Third, in order to get rid of the system of corruption, several legislative measures are needed. These measures include—establishment of an effective Lok-pal, introduction of a law on public procurement and transparency, and the creation of legislative framework governing the functioning of regulatory institutions for ensuring both functional autonomy and accountability.
Finally, in order combat corruption, it is quite imperative to ensure speedy prosecution and trial in corruption related cases. Reforms in the legal process need to be introduced immediately to remove long delays in the Judicial process.
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