Indian Economy, 5th edition (18 page)

The Plan further adds that by prioritising agriculture (in place of industry) the economy will be able to solve three major problems which have been ailing the economy:

(i)
With the increase in the agricultural production the economy will have food security,

(ii)
Emphasis on agriculture will give a great thrust to employment generation (92 per cent of the employment is today generated by the unorganised sector with agriculture being the biggest), and

(iii)
Purchasing power of the masses will increase which will reverse the long-standing situation of the ‘market failure’ in the economy (that is why India sells lesser industrial goods and the industries lack the market for their products. It means by emphasising upon the agriculture sector, the economy will be able to boost its income from the industries).

Accepting agriculture as the ‘core element’ of the economy, the Plan suggested key reforms which are at their various stages of implementations:

•
Elimination of inter-state barriers of trade and commerce;

•
Encouraging contract farming and permitting leasing in and leasing out of agriculture lands;

•
Need to amend the Essential Commodities Act;

•
Liberalising agri-industry, agri-trade and exports;

•
Replacement of various acts concerning food by one comprehensive ‘Food Act’;

•
Permitting ‘future trading’ in all commodities;

•
Removal of restrictions on financing of stocking and trading.

3. Governance Recognised among the Most Important Factors of Development

It was for the first time
that the economic think tank, the Planning Commission went to comment upon the issue of Governance (which has been only of political concern till date and the PC never thought to ponder upon such issues). In its first comment upon it the PC recognised governance among the most important factors to realise the planned goals (a full chapter devoted to it in Vol. I, Tenth Plan). The Government also did set up an empowered committee on the matter which advised a list of reforms:

•
Improved people’s participation through the PRIs;

•
Increased involvement of Civil Society and the NGOs;

•
Civil Service reforms for improving transparency, accountability and efficiency; security of tenure for the civil servants with more equitable system of rewards and punishments;

•
Rightsizing both the size and role of Government;

•
Revenue and judicial reforms and

•
Use of Information Technology for ‘good governance’

After the World Bank report on ‘Good Governance’ in the mid-1990s, the Government has been trying to sensitise the issue. Finally, it was the Tenth Plan which accepted the immediate need for good governance.

4. New Steps of Economic Reforms to be Taken by the State

In a major decision it was articulated that now onwards all the new steps of economic reforms will be taken by the states with the centre playing a supportive role. It was the time when the Government initiated the Second Generation of the Economic Reforms. Till date the states had been playing a secondary role in the process of economic reforms. That is why the economy had not been able to tap the expected benefits from it. Now the method and strategy from the reforms process have gone in for a change.

5. Monitor
able Targets of Development Set for the First Time

There used to be planned targets in the past but this time an innovative way of setting these targets was initiated. The Plan did set, for the first time, a national level monitorable targets in eleven areas, showing development:

(i)
Poverty reduction: 26 to 21 per cent by 2007 and to 15 per cent by 2012.

(ii)
Population growth rate: 21.3 to 16.2 per cent by 2001–11.

(iii)
Growth in gainful employment to, at least, keep pace with addition to the labour force over the Tenth Plan period.

(iv)
Schooling: 100 per cent enrollment by 2003 and five years compulsory schooling by 2007 to be completed by 2012.

(v)
Literacy: 65 to 75 per cent by 2007 and further increased to 80 per cent by 2012.

(vi)
Infant Mortality Rate: to be reduced from 72 to 45 by 2007 and 28 by 2012 (per 1000).

(vii)
Maternal Mortality Rate: to be reduced from 40 to 20 by 2007 and 10 by 2012 (per 1000).

(viii)
Potable water: to all villages by 2012.

(ix)
Reducing Gender gaps: in Literacy and wage rates by 50 per cent by 2007.

(x)
Forest Cover: to be increased to 19 per cent by 1999–2000, 25 per cent by 2007 and 33 per cent by 2012.

(xi)
De-polluting the waterbodies: major rivers by 2007 and other notified water stretches by 2012.

The monitorable targets have importance as the concerned central Ministries are parties to its realisation. The ministries hand over an undertaking to the PC about their strategies of realising the targets and performance reports are submitted by them which become bases for the monitoring by the PC.

MONITORABLE TARGETS SET
BY THE 12TH PLAN

To focus the energies of the government and other stakeholders in development, it is desirable to identify monitorable indicators, which can be used to track the progress of our efforts. Given the complexity of the country and the development process, there are a very large number of targets that can and should be used – however, there is a
core set of indicators
which could form the objectives towards which all development partners can work, which includes not only the Central and State Governments, but also local governments, CSOs (Civil Society Organisations) and international agencies.
The
12th Plan (2012-17)
has set
Twenty-five Monitorable Targets
in
seven broad areas
reflecting its (India’s) ‘
vision of rapid, sustainable
and more
inclusive growth’:
*

Economic Growth

1.
Real GDP Growth Rate of 8 per cent.

2.
Agriculture Growth Rate of 4.0 per cent.

3.
Manufacturing Growth Rate of 10.0 per cent.

4.
Every State must have an average growth rate in the Twelfth Plan preferably higher than that achieved in the Eleventh Plan.

Poverty and Employment

5.
Head-count ratio of consumption poverty to be reduced by 10 percentage points over the preceding estimates by the end of Twelfth Five Year Plan.

6.
Generate 50 million new work opportunities in the non-farm sector and provide skill certification to equivalent numbers during the Twelfth Five Year Plan.

Education

7.
Mean Years of Schooling to increase to seven years by the end of Twelfth Five Year Plan.

8.
Enhance access to higher education by creating two million additional seats for each age cohort aligned to the skill needs of the economy.

9.
Eliminate gender and social gap in school enrolment (that is, between girls and boys, and betweenSCs, STs, Muslims and the rest of the population) by the end of Twelfth Five Year Plan.

Health

10.
Reduce IMR to 25 and MMR to 1 per 1,000 live births, and improve Child Sex Ratio (0–6 years) to 950 by the end of the Twelfth Five Year Plan.

11.
Reduce Total Fertility Rate to 2.1 by the end of Twelfth Five Year Plan.

12.
Reduce under-nutrition among children aged 0–3 years to half of the NFHS-3 levels by the end of Twelfth Five Year Plan.

Infrastructure, Including Rural Infrastructure

13.
Increase investment in infrastructure as a percentage of GDP to 9 per cent by the end of Twelfth Five Year Plan.

14.
Increase the Gross Irrigated Area from 90 million hectare to 103 million hectare by the end of Twelfth Five Year Plan.

15.
Provide electricity to all villages and reduce AT&C losses to 20 per cent by the end of Twelfth Five Year Plan.

16.
Connect all villages with all-weather roads by the end of Twelfth Five Year Plan.

17.
Upgrade national and state highways to the minimum two-lane standard by the end of Twelfth Five Year Plan.

18.
Complete Eastern and Western Dedicated Freight Corridors by the end of Twelfth Five Year Plan.

19.
Increase rural tele-density to 70 per cent by the end of Twelfth Five Year Plan.

20.
Ensure 50 per cent of rural population has access to 40 lpcd piped drinking water supply, and 50 per cent gram panchayats achieve Nirmal Gram Status by the end of Twelfth Five Year Plan.

Environment and Sustainability

21.
Increase green cover (as measured by satellite imagery) by 1 million hectare every year during the Twelfth Five Year Plan.

22.
Add 30,000 MW of renewable energy capacity in the Twelfth Plan.

23.
Reduce emission intensity of GDP in line with the target of 20 per cent to 25 per cent reduction over 2005 levels by 2020.

Service Delivery

24.
Provide access to banking services to 90 per cent Indian households by the end of Twelfth Five Year Plan.

25.
Major subsidies and welfare related beneficiary payments to be shifted to a direct cash transfer by the end of the Twelfth Plan, using the Aadhar platform with linked bank accounts.

States are encouraged to set
state-specific targets
corresponding to the above, taking account of what is the reasonable degree of progress given the initial position. Sector-wise monitorable growth targets set by the States have also been given by the Plan.

6. Differential Development Strategy Adopted

The Tenth Plan accepts that national targets do not necessarily translate into balanced regional development. It further adds that the potential and constraints of each state differ vastly. That is why the Plan goes on to adopt a differential development strategy.
Under this strategy, separate state-wise growth and other monitorable targets were worked out by the P.C. for the states with their consultation so that the states can focus on their development plans. The states are getting central plan support according to their development requirement now as against the past pattern of plan allocations. The developmental funds to the states and the central loans to them now accrue subject to their performance concerning the monitorable targets set for the states (to which they agreed).

7. Monitoring the Progress of Various
c
entral Ministries

With the Tenth Plan the Government has started a process under which the progress of different Central Ministries is monitored by the PC. This is how the policy initiatives of the various Ministries and the PC’s idea of development have been streamlined. The PC has really emerged as a ‘super cabinet’ in this way.

8. Relevance of Planning to Economic
Reforms

After the two Five Year Plans (the eighth and the ninth) were already implemented, the Government took up the cause of establishing a relevance between the process of planning and the broader process of economic reforms. Different steering Committees have been set up which look after the plan implementation of the different sectors according to the decided idea of the economic reforms. This step should be seen as the Government’s answer to the critics who opined that planning has become irrelevant in the era of economic reforms.

9. Reforming the Planning Process

The Government called this Plan a ‘reform plan’ rather than a ‘resource plan’. There has been a long-standing criticism about Indian plans that they are mere excercises in the resource mobilisation. Probably, the PC has tried to do away with this criticism. The above given seven points visibly prove that the Tenth Plan was not merely a ‘resource plan’. Basically, the Plan initiates many pathbreaking changes in the planning process–its methods, strategies and the ideas–all at the same time. Rightly, it has been called a ‘reform plan’ by the PC. Second, this was the first plan in the era of economic reforms which accepts to go for establishing relevance to the process of the economic reforms. From this perspective, too, this Plan is a ‘reform plan’.

The inclusion of the above-given new elements into the Indian planning process has gone to really change the nature, role and scope of planning in the country. All these new elements are today carried forward by the Eleventh Plan with an emphasis wherever it is required. The planning process is more grown up today in India as the changes in the political arrangements at the centre do not seem to be affecting it unlike the past.

A CRITICAL EVALUATION

Planning has been subject to a number of criticisms right since its inception in the country. With the passage of time, not only the number of criticism increased but more importantly the shortcomings of planning were pointed out. Although after considerable delay, but the Governments took note of the shortcomings besides taking some major steps. The criticisms stand even today but with one difference that the Government is not only conscious of them but also trying to do away with them. We may briefly discuss the major criticisms of planning in India as well as the follow ups from the Government to do away with them as under:

1. Lack of ‘Perspective’ in Planning

According to experts, if a nation is going for economic planning it must have ‘perspective’ element in it. To have perspective in planning, two basic elements need to be fulfilled, namely—