The Hindu Business Line : Draft approach paper to Eleventh Plan getting ready

Growth plans
Growth rate averaging 8 per cent in the last 3 years of the 10th Plan might be accelerated to 9 per cent
Projection on agriculture, industry and services sectors under 4 GDP growth scenarios

New Delhi , March 15

The Planning Commission is busy finalising a draft Approach Paper to the Eleventh Five Year Plan (2007-12), holding a series of internal meetings to evolve the basic parameters that could form the bedrock of the next five-year Plan.

As the penultimate year of the Tenth Plan is to be over in a fortnight, the Plan panel has held a couple of rounds of internal meetings to craft the contours of the Eleventh Plan.

The Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, told Business Line here that "we want the first stage of draft approach paper to be ready shortly so that a full meeting of the Planning Commission could be held next month to finalise the formal Draft Approach Paper to the Eleventh Plan". Once the full meeting endorses the Approach Paper, the Cabinet would have to accord its nod before it is placed at the National Development Council to get the imprimatur of the State Chief Ministers.

Even as Mr Ahluwalia refrained from disclosing further about what would be the next Plan's approach, the emphasis of the National Common Minimum Programme (NCMP) on primary education, poverty reduction, primary health, provision of electricity in all villages, rural connectivity and employment generation might form the thrust area of the approach paper.

Official sources told Business Line here that in the couple of internal meetings to evolve a draft approach paper, several objectives were set forth, the principal being the GDP growth rate.

It was averaging 8 per cent in the last three years of the Tenth Plan and might be accelerated to 9 per cent range during the Eleventh Plan so that a "strong foundation for 10 per cent growth in the 12th Plan to double per capita income by 2016-17" might be a distinct possibility.

It must be reckoned that against the Tenth Plan targets of 8.1 per cent GDP (at market prices), the performance during the first four years (at 1999-200 prices) of each major component was mixed.

Targets

For agriculture, it was 1.4 per cent against the 4 per cent target.

For industry, the average growth during the first four years was 8.1 per cent against 8.7 per cent target and services was 8.8 per cent against the target of 9.3 per cent.

The sources said four scenarios of 7 per cent, 7.5 per cent, 8 per cent and 9 per cent GDP growth were evolved under which how the sub-sect of agriculture, industry and services growth could be.

Thus in these four scenarios, agriculture growth could be 3.2 per cent, 3.4 per cent, 3.7 per cent and 4.1 per cent respectively.

In the case of industry, the scenarios envisage 8.2 per cent, 8.8 per cent, 9.4 per cent and 10.5 per cent respectively.

Services sector growth scenarios range from 7.7 per cent, 8.2 per cent, 8.8 per cent and 9.9 per cent.

To register 8-9 per cent GDP growth during the Eleventh Plan, the investment and savings requirements also must be stepped up from the extant level, the sources said.

Under a 8 per cent GDP scenario in the Eleventh Plan, the average investment rate must be 32 per cent, in which domestic savings rate is 29.6 per cent, so that the current account deficit (CAD) could be 2.4 per cent of GDP, he added.

Where the GDP is projected to grow at an average 9 per cent, the average investment rate must be 35.1 per cent, in which domestic savings rate is estimated at 32.3 per cent, leaving the CAD at 2.8 per cent.