Economy Dec 24, 2012
New Delhi: The Plan panel has warned that persistent policy logjam could pull down the annual average economic growth rate in the 12th Five Year Plan (2012-17) to 5-5.5 percent, from 7.9 percent recorded in the 11th Plan.
In case the government pursues a well designed strategy, the annual average growth rate in the 5-year policy period could move up to 8.2 percent, said the 12th Plan draft document which will be placed before the country's apex policy making body National Development Council (NDC) on Thursday.
NDC, headed by the Prime Minister with all Chief Ministers and Union Cabinet Ministers on its board, is the final authority to approve a Five Year Plan. According to the document, "insufficient action" on the part of government would restrict the annual average growth rate in 12th Plan to 6-6.5 percent.
In the policy logjam scenario, one of the three scenarios suggested by the document, "the growth rate can drift down to 5-5.5 percent". The document has made a case for "well designed strategy", saying that only the first scenario with 8.2 percent average growth rate in 12th Plan can meet the aspirations of the people of this country.
Although the document envisages 6.7 percent growth rate in the current fiscal, it has been projected at 5.7-5.9 percent in 2012-13 by the Finance Ministry. The strategy for the full Plan would aim at raising agriculture output to 4 per cent and manufacturing sector growth to 10 percent.
It also wants all the states to set up higher target of growth than what was achieved in the 11th Five Year Plan (2007-12). The document proposes to bring down poverty by 10 percentage points by the end of the 12th Plan and generate five crore new jobs in non-farm sector.
As regard the infrastructure sector, the document says that efforts should be made to increase investment in this sector to 9 percent of the GDP by the end of the Plan period. The other targets include increasing green cover by one million hectare every year and adding 30,000 MW of renewable energy generation capacity in the Plan period.
It also seeks to reduce emission intensity of the GDP in line with the target of 20-25 reduction by 2020 over 2005 levels. The document has pegged the aggregate Plan resources at 37.16 lakh crore during the five year period.