Competitive Exams: Current Affairs 2011: XII Five Year Plan

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XII Five Year Plan


  • The Central Government has set in motion the process for formulation of the XII Plan (2012 โˆ’ 17) starting April 1,2012, with a tentative intent to achieve a GDP (gross domestic product) growth of about 9 โˆ’ 9.5 per cent during the five-year period.
  • As has been the practice for the past many decades, the exercise involves the firming up of an approach paper prepared by the Planning Commission which lays down the major targets in the economic and social sectors, the key challenges and resources that are required in meeting them and the broad strategy that must be adopted to achieve these objectives.
  • Once a consensus is reached on the desired objectives and targets in consultation with the ministries and departments concerned, the approach paper is to be cleared by the Union Cabinet and placed before the National Development Council (NDC) , comprising the Centre and chief ministers of all States, for final approval to facilitate implementation.
  • But in a radical departure from yesteryears when the targets and objectives of the Plan period were decided by the Centre and the States, the Commission this time round has sought to develop an inclusive and participative approach to the entire planning process.
  • Towards this end, it has evolved a web based consultative process in which all interested citizens and stakeholders can participate by giving their views and suggestions on a multi-dimensional strategy matrix that has been developed indicating some of the key areas that need to be explored.
  • Thus, for the first time in the history of Indiaีšs policy planning, the inclusive approach has led to commencement of a wide consultative process on the challenges for the XII Plan.
  • According to the Commission, apart from 900 civil society organisations (CSO) , industry associations and think-tanks across the country that have participated in the inclusive planning process, over 32,000 netizens have left many insightful comments following the launch of a dedicated website 12thplan. Gov. In which is also linked to Facebook.
  • Among the other key messages from such consultation, while citizen groups broadly support the stated objectives of other government programmes, the design and institutional arrangements are weak and greater devolution and empowerment is needed. Besides, government programmes need a new architecture which means greater localisation, break-down of silos, feedback from citizens and mechanism for learning and sharing of best practices.
  • Moreover, since a major contribution to economic growth now comes from the private sector, the need is for a policy environment that supports this dynamism.
  • In effect, people want the government to create an environment for nurturing enterprise, improving markets, supporting innovation, providing access to finance and inculcating respect for common pool resources.
  • In an environment of ongoing investigations into a host of scams CWG, 2G and Adarsh Housing the malady of corruption has become so all-pervasive that people are seeking deliverance from this deep-rooted scourge. Three factors have shaped the outlook and monetary policy for 2011 โˆ’ 12.
  • First, global commodity prices, which have surged in recent months are, at best, likely to remain firm and may well increase further over the course of the year. This suggests that higher inflation will persist and may indeed get worse.
  • Second, headline and core inflation have significantly overshot even the most pessimistic projections over the past few months. This raises concerns about inflation expectations becoming unhinged.
  • The third factor, one countering the above forces, is the likely moderation in demand, which should help reduce pricing power and the extent of pass-through of commodity prices. This contra trend cannot be ignored in the policy calculation. However, a significant factor influencing aggregate demand during the year will be the fiscal situation
  • The latter portion of the third factor is the operative and crucial part which shapes the monetary policy outlook for the current fiscal. The RBI is in a hurry to pass-through the high oil prices to consumers. Otherwise, navigating inflation to a soft landing of 6 per cent at end March 2012 would end up as an unfinished agenda for the central bank.
  • The monetary policy trajectory that is being initiated in this annual statement is based on the basic premise that over the long run, high inflation is inimical to sustained growth as it harms investment by creating uncertainty. Current elevated rates of inflation pose significant risks to future growth. Bringing them down, therefore, even at the cost of some growth in the short-run, should take precedence.

Courtesy: The Hindu and Times of India