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11th Five-Year Plan draft projects nine per cent economic growth

NEW DELHI: The Planning Commission on Thursday approved the draft Eleventh Plan pegging the country’s overall economic growth at nine per cent during the five-year period, even as Prime Minister Manmohan Singh expressed serious concern over the whopping oil, food and fertilizer subsidies that are poised to exceed Rs.1,00,000 crore during the base year itself.

The approved Plan draft, with its sharp focus on agriculture and social sector development, is to be cleared by the Union Cabinet and then placed before the National Development Council (NDC) early next month for ratification.

Chairing the meeting of the full Planning Commission here, Dr. Singh said: “We need to address the problem of mounting subsidies on food, fertilizers and now, on petroleum which is a recent phenomenon. Over Rs.1,00,000 crore is going to be spent this year alone on these three items.” He asked his Cabinet colleagues to “reflect on what these mean for our development options and what development options these subsidies are shutting out.”

The Prime Minister asked whether such a large outgo on subsidies [does not] mean “fewer schools, fewer hospitals, fewer scholarships, lower public investment in agriculture and poor infrastructure?”

Holding out a warning over the country’s food security coming under stress in the next decade, Dr. Singh said: “Global trends in food production and prices and our own demand patterns of consumption are going to put increasing pressure on both the availability and prices of basic food items” and pointed out that these pressures would have to be managed to ensure that “our food planning adjusts to the emerging market realities.”

The draft for the Plan, for the five years begun April 2007, aims to hike the average GDP (gross domestic product) growth rate to nine per cent from the 7.6 per cent achieved during 2002-07. Also, with a doubling of the plan outlay to Rs. 36,44,718 crore, the document seeks to make growth more inclusive through higher outlays for priority sector programmes. Of the total plan size, the Centre’s gross budgetary support (GBS) would be Rs. 14,00,000 crore.

The plan has also fixed certain important targets which include taking industrial and services sector growth to 9-11 per cent and investment rate to 36.7 per cent.

The plan draft aims to reduce the level of poverty by 10 percentage points by way of generating 70 million new jobs during the five-year period as also to ensure electricity connection to all villages. With various monitorable targets set for various priority programmes at the Central and State levels, the thrust of the plan document is on social sectors, agriculture and rural development.

The education sector is set to be a big beneficiary with the plan document seeking to increase the allocation to 19.36 per cent of the GBS from 7.68 per cent in the Tenth Plan. Already, the government has drawn up a comprehensive plan to improve primary, secondary and higher education, including the setting up of new IITs, IIMs and colleges.

Dr. Singh pointed out that agricultural growth, having averaged about four per cent in the last two years, was likely to remain at the same level during the current fiscal also.

Turning to the issue of more inclusive growth, he said that the high nine per cent growth achieved during the first four years of the UPA regime should not be restricted to “isolated pockets or to certain sections of society.”

The growth process, he said, should be far more broad-based and the plan would draw up a roadmap for achieving such inclusive growth. The growth tempo and target of nine to 10 per cent for the plan period must be maintained and the government must ensure that the delivery services of empowerment programmes were effective and free of leakages, he said.

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