While lowering economic growth forecast for the 12th Five Year Plan to 8 per cent, Prime Minister Manmohan Singh has signalled that tougher reforms, faster clearances for mega power projects, and more fuel supply agreements with countries like China are in order.
Unwittingly, he also admitted the failures of the UPA government on key fronts like containing inflation, progress on infrastructure reforms, narrowing the fiscal and current account deficits and reviving growth-oriented exports.
Nevertheless, the PM’s growth expectations are realistic, for economic imbalances created due to elevated inflation stoked by high energy prices, mounting fiscal deficit and huge current account deficit have impacted overall growth. So has growing scarcity of water resources, exacerbated by the demand-supply gap caused by rapid economic growth and urbanisation.
While the government will increase its outlays to the water sector substantially in the 12th Plan, it’s also key to further pushing agricultural productivity, — an area more crucial than earlier surmised — to boost employment generation and aid rural poverty reduction programmes.
While the government will increase its outlays to the water sector substantially in the 12th Plan, it’s also key to further pushing agricultural productivity, — an area more crucial than earlier surmised — to boost employment generation and aid rural poverty reduction programmes.
The Backward Regions Grant Fund (BRGF), which generated employment in rural districts during the 11th Plan, should be modified to tie in with water conservation and generation of manufacturing-based employment for schemes like the KBK (Kalahandi, Balangir, Koraput Region) Plan which helped lower poverty indicators in rural Orissa.
The PM’s speech at the National Development Council meeting last week stressed that the percentage of population below the official poverty line has declined roughly 2 per cent annually since 2004-05 —two-and-a-half time faster than the rate of decline between 1993-94 and 2004-05. The key to this achievement has been better agricultural growth.
Better agricultural performance is a reason why poverty declined faster with economically laggardly states doing much better during the 11th Plan, when average growth of the five poorest states exceeded the national average for the first time in any Plan period.
Better agricultural performance is a reason why poverty declined faster with economically laggardly states doing much better during the 11th Plan, when average growth of the five poorest states exceeded the national average for the first time in any Plan period.
It is nobody’s case that the 8 per cent plus average growth rate outlined in the 12th Plan Document will be achieved over the next four years, in a scenario where economic growth in 2012-13 is likely to be lower than 6 per cent.
No Five Year Plan since 1990 has exceeded its growth target. Hence, the 12th Plan target is ambitious. Equally manifest now is the government’s clear will to engage India’s growth conundrums head on.
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