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Reorienting plan priorities

Both in terms of commitment and allocation of resources across sectors, the draft eleventh five year plan represents a significant shift from the tenth. Total expenditure out of public resources is estimated at Rs.14.2 lakh crore, which is 75 per cent more than the Rs.8 lakh crore expended during the current plan. Equally striking is the step-up in the allocation of resources for the priority sectors — education, agriculture, health care, and infrastructure. These se ctors will account for almost 75 per cent of the total expenditure. The corresponding figure in the tenth plan was 55 per cent. Inclusive growth, a key objective of planning today, calls for much larger public spending in these sectors. In fact, low levels of public investment are among the major reasons why these sectors languished in the recent past. As for agriculture, a substantial rise in investment is necessary not only for achieving an average annual growth rate of at least four per cent but also for correcting the income inequalities between rural and urban areas. The share of agriculture and rural development will go up to 23 per cent from about 18 per cent in the tenth plan. Education will account for almost a fifth of the total plan outlay, sharply higher than the 7.7 per cent during the current plan. Aggregate outlays under the Central and State plans are expected to increase to 13.5 per cent of the GDP from 9.4 per cent.

The Planning Commission’s confidence in raising resources of such a magnitude may not be misplaced. Economic growth over the recent past has been robust — 9 per cent on an average. Tax collections have been buoyant and the financial position of the Centre and the States has improved. Besides, the Commission is also banking on the private sector to contribute much more in areas such as infrastructure, where several initiatives are already under way. The draft eleventh plan, recently approved by the full Planning Commission chaired by the Prime Minister, will go before the National Development Council for its clearance later this year after getting the Cabinet’s nod. It envisages an annual growth rate of between 9 per cent and 10 per cent during the five-year period, 2007-2012. In the event, faster and more inclusive economic growth should be accompanied by conscious efforts to improve the quality of basic services such as heath care, education, power, and water supply, if the eleventh plan is to make a real difference.

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