Dr.Debesh Bhowmik
The 12th plan is formulated on the basis of success over the inclusive growth target of the 11th plan.The plan envisaged 9% GDP growth rate with 4% for agriculture,fisheriesand forestry,8% for mines,9.8% for manufacturing,8.5% for electric,gas and water supply,10% for construction,11% for trade,transport and communication,10% for insurance,real estate and service of trade, and 8% for social and private services.If the GDP is realized then investment must grow 38.7% and in which fixed investment in household sector ,private institutional sector and government sector should grow at the rates of 12%,12.4% and 9.1% respectively.The trade balance deficit will grow at the rate 5% and current account surplus would grow at the rate of 3.8%.Now,the planning commission expects that global meltdown and Euro crisis affected Indian capital and money market too, for which growth rate may be reduced and,on the other hand,Indian inflationary pressure incuding Rupee depreciation must hit down growth rate too. So, ex-post rate would differ.
Note that human development and poverty alleviation are not given equal status with inclusive growth target, so that health and education sectors have not given prioritized in the plan.Yet,it emphasized on universal elementary education and right to education,mid day meal scheme were taken into consideration.In health,primary health centre,comprehensive health centre,district knowledge centre,ICDS,and interlinking all health facilities,Rastriya,Sashta Bima Yojona were taken for immediate implementation.Irrespective of these programme,the health and education expenditure were allocated only 3% of GDP which is too lower than other advanced economies.
In the agriculture sector,the previous average growth rate would not exceed more than 3%.In 12th plan,MGNREGA and Food Security Bill, FDI in retail trade,food processing,building a national grid for cold storages,setting up small farmers agribusiness consortium were emphasized for implementation.The plan assumed to tag women empowerment with agricultural development and stressed on agricultural research .The paradox is that the rate investment in agriculture has been reducing and thus the share of agriculture in GDP has been falling gradually. These are not the good indicators of agricultural development for India. Recently, the poor farmers are committing suicide due to debt burden because they could not get produce price but spending too high cost of cultivation.Besides,this sector is facing climate change frequently.In this case ,India government formulated new climate policy where crop pattern change were called for.
The 12th plan has emphasized more on infrastructure development especially on electricity including non renewable energy,telecommunications,oil and gas,irrigation,rail,port and roads,etc which can spend only 9.95% of GDP because 11th plan has achieved 10.70% growth rate of infrastructure.
12th plan is not exposed too much on industrial growth but interested in small sectorsalthough industrial growth is projected at 11%. Even,it is silent on speedy employment growth rate.The imbalance of I-S is catapulting gradually.As a result,gap between the target and actual growth rate which is shown in the Figure given below.
The external sector of the economy is structurally disequilibrium since trade balance is deficit since long and inflow of capital flows especially FDI,equity,portfolios are mounting .As result,BOP became deficit which would be more worse because of global financial meltdown and Euro crisis.The 12th plan emphasized on banking and financial sector reform including counter cyclical fiscal policy and tight monetary policy. It stressed on increase in capital formation,rupree exchange rate stability and make favourable environment on FDI.
Lastly, we may refer to the actual scenario of productivity of both agriculture and industry sectors and the GDP earned from external sector by which India is less competitive in international economy, is growing at a low rate. The growth of the employment is not sustainable to the developmental process , so that unused labour force hinder the consumption pattern of the economy and S-I is widened . Moreover, Corruption and black money have affected the motto of the plan towards right direction and hampers the transparency of the government.