In this article we will discuss about the Achievements of the Eleventh Plan of India. After reading this article you will learn about: 1. Subject-Matter of Achievements of the Eleventh Plan in India 2. Appraisal of the Eleventh Plan 3. Sectoral Growth.
Subject-Matter of Achievements of the Eleventh Plan in India:
The Approach Paper of the Eleventh Plan was prepared and finalised against a backdrop of high expectations arising from some aspects of the recent encouraging performance of the economy. The UPA Government at the Centre while finalising the approach paper has given high priority on more broad based and inclusive growth with a special thrust to reduce poverty, create employment opportunities, reduction of gender gaps, raising literacy and also to target robust agricultural growth.
As the Eleventh Plan has completed its term, thus under this backdrop it is quite necessary to make a review of the achievements of the plan. Although up-to-date information is not readily available for making such appraisal but the observations made by Economic Survey, 2008-09 and 2009-10 can be considered as an important inputs in this regard.
Appraisal of the Eleventh Plan:
In respect of attaining annual growth rate of GDP, although the approach paper of the plan initially set the target of attaining 9.0 per cent annual growth rate of GDP but the plan started with a positive sign. The Economic Survey 2012-13, reveals that the growth rate of GDP at 2004-05 prices was 9.7 per cent in 2007-08, 6.5 per cent in 2008-09, 8.6 per cent in 2009-10, 8.8 per cent in 2010-11 and 6.4per cent in 2011-12. GDP growth rate is likely to average 8.0 per cent over Eleventh Plan.
Thus during last two years, the plan experienced a slow growth rate as a result of global economic slowdown.
Gross Domestic Savings and Capital Formation:
During the Eleventh Plant, the gross domestic savings attained a growth rate of 36.8 per cent of GDP in 2007-08 and then declined to 32.0 per cent of GDP in 2008- 09, 33.7 per cent in 2009-10 and 34.0 per cent in 2010-11 and then to 30.8 per cent in 2011-12.
The rate of capital formation as per cent of GDP was 38.1 per cent in 2007-08 and then declined to 34.3 per cent in 2008- 09 and 36.5 per cent in 2009-10 and then to 36.8 and 35.0 per cent in 2010-11 and 2011-12 respectively. The targets for the domestic savings rate and investment rate during the Eleventh Plan were 32.3 per cent and 35.1 per cent respectively.
The Eleventh Plant has also projected to create 58.0 million employment opportunities during the plan period as against the projected increase in labour force of 45 million leading to reduction in unemployment rate below 5 per cent.
During the first three years of the plan, employment generations programme of the rural areas progressed satisfactorily. But the urban employment scenario during first three years of the plan faces a setback as a result of global economic slowdown.
Although the draft Eleventh Plan had set a target to attain annual average growth rate of 4.1 per cent in Agriculture and allied sector, but during the Eleventh Plan it has attained 5.8 per cent growth rate In 2007-08, 0.1 per cent growth rate in 2008-09 and then to 1.0 per cent growth rate in 2009-10,7.0 per cent in 2010-11 and finally by 2.5 per cent in 2011-12.
The index of agricultural production (2007-08 = 100) increased from 100.0 in 2007-08 to 107.0 in 2008-09 and then further declined to 102.8 in 2009-10 and then increased to 124.1 in 2011-12 showing a mixed performance.
In respect of mining and quarrying the Eleventh Plan set a target of 5.0 per cent but during the five years of the plan, this sector could attain an average growth of 2.98 per cent. The yearly growth rate of this sector was 3.7 per cent in 2007-08, 2.1 per cent in 2008-09, 6.3 per cent in 2009-10 and 5.0 per cent in 2010-11 and then to (-) 2.2 per cent in 2011-12.
As against the targeted growth rate of 10.5 per cent in industrial sector during the Eleventh Plan, this sector could attain on an average 5.29 per cent during the plan. The Electricity gas and water supply could attain on an average 6.01 per cent during the Eleventh Plan.
The growth rate attained by the manufacturing sector was 10.3 per cent in 2007-08, 2.5 per cent in 2008-09, 4.8 per cent during 2009-10 and 9.0 per cent in 2010-11 and 3.9 per cent in 2011-12.
During the five years of the Eleventh Plan, the services sector attained an annual average growth rate of 9.7 per cent on against the targeted growth rate of 9.9 per cent. The services sector attained a growth rate of 8.7 per cent during 2011-12.
Transport, storage communication etc.:
During the first two years of the Eleventh Plan, trade, hotels, transport, storage and communication attained the growth rate of 10.7 per cent in 2007-08 and 7.6 per cent in 2008-09, 10.3 per cent in 2009-10, 11.1 per cent in 2010-11 and 11.2 per cent in 2011-12.
Again the financing, insurance, real estate and business services attained a growth rate of 12.0 per cent in 2007-08, 12.0 per cent in 2008-09, 9.4 per cent in 2009-10, 10.4 per cent in 2010-11 and 9.1 per cent in 2011-12. Again community, social and personal services attained growth rate of 6.9 per cent in 2007-08, 12.5 per cent in 2008-09, 12.0 per cent in 2009-10 and 4.5 per cent in 2010-11 and 5.9 per cent in 2011-12.
During the Eleventh Plan the price behaviour of the country reflect initially a moderate behaviour followed by sharp rise in the subsequent two years. Accordingly, the annual average rate of inflation (WPI) which was 4.8 per cent in 2007-08 increased sharply to 8.4 per cent in 2008-09 and then to 9.56 per cent in 2010-11 and then to 9.1 per cent (up to December) in 2011-12.
Thus the appraisal of the Eleventh Plan shows that the Indian economy has been experiencing a mixed performance during the plan. Although the country experienced growth rate of 9.6 per cent in the first year, i.e., 2007-08 of the Eleventh Plan but the country has experienced a slowdown in its growth path in the next four years of the plan. However, the growth rate is likely to improve in the next plan.
The Economic survey, 2009-10, observed in this connection, the fiscal year 2009-10 began as a difficult one. There was significant slowdown in the growth rate in the second half of 2008-09, following the financial crisis that began in the industrialized nations in 2007 and spread in the real economy across the world. The growth rate of the gross domestic product (GDP) in 2008-09 was 6.7 per cent, with growth in the last two quarters (of 2009-10) hovering around 6 per cent.
The continued recession in the developed world, for the better part of 2009-10, meant a sluggish export recovery and a slowdown in financial flows into the economy. Yet, over the span of the year, the economy posted a remarkable recovery not only in terms of overall growth figures but, more importantly, in terms of certain fundamentals, which justify optimism for the Indian economy in the medium to long term.
On 24th March 2010, a meeting of the full Planning Commission conducted a mid-term review of the Eleventh Five Year Plan and lowered Indian’s targeted growth of 9 per cent per annum because of past performances and prevailing situations.
The appraisal document which was placed in the meeting stated that “the average rate of growth in the plan period could be a little over 8 per cent. The economy would be well positioned for the transition to a growth rate higher than 9 per cent in the Twelfth Plan period.”
While addressing the meeting Prime Minister Dr. Manmohan Singh observed that the past two years were particularly difficult for the Indian economy due to the impact of the sharp global slowdown that was exacerbated by lowering food production last year due to failure of monsoon.
Yet the country has been able to maintain a growth rate of 7.0 per cent during the last two years. However, the target now would be to move towards 10 per cent growth in the medium term which can be made possible by a strong rebound in agriculture and infrastructure development with greater participation by the private sector.
Thus at the end of the Eleventh Plan, it is stated that although the draft plan set the target of attaining 9.0 per cent annual average growth rate of GDP but it could manage to attain annual average growth rate of 7.7 per cent during the Eleventh Plan under the prevailing global economic environment.
The Economic Survey, 2011-12 observed that “The global economic environment, which has been tenuous at best throughout the year, turned sharply adverse in September 2011 owing to the turmoil in the Eurozone, and questions about the outlook on the US economy provoked by rating agencies. However, for the Indian economy, the outlook for growth and price stability at this juncture looks more promising. There are signs from some high frequency indicators that the weakness in the economic activity has bottomed out and a gradual up-wing is imminent.”