Sectoral Allocations Of Public Sector Resources For the Ninth And Tenth Plan
Regional Balance and Poverty
A unique feature of the Tenth Plan is to lay down specific targets for each state in consultation with State governments. The following table provides information on growth rate targets for different states in the Tenth Plan along with the growth rates achieved during the Eighth and the Ninth Plan.
During the Eighth and the Ninth Plan period, the rate of growth in better-off States (.i.e., States with higher per capita GDP), viz. Gujarat, Maharashtra, etc. have generally been higher than the States with a lower level of per capita income like Bihr, Orissa and Uttar Pradesh. Such a phenomenon has resulted in higher income differences among States. According to some studies, the regional disparities tended to increase gradually in the 1980s followed by a relatively steep increase in the years after the reforms were launched and a gradual increase through the 1990s.
The Tenth Plan aims at reversing the pace of increase in inequality and create the necessary preconditions to help the worse-off States to catch up. Raising of growth rate is also important from the point of view of reducing poverty levels prevailing in the country.
External Sector Dimensions
According to the Tenth plan, Indian exports are primarily supply-side determined. Thus, to take advantage of international markets, the country has to produce an adequate volume of exportables. The tenth plan envisages that exports are likely to increase from $ 44,915 million in 2001-02 to $ 80,419 million by 2006-007. This would mean a compound growth rate of 12.4 per cent during the Tenth Plan period.
“In India, imports are primarily demanded determined and are also sensitive to changes in average tariffs. The Tenth Plan projections of imports were based on two scenarios. In Scenario I, tariffs are sought to be reduced from 37.1 per cent in 2001-02 to 15 per cent in 2006-07. In Scenario II, tariff reduction is gradually sought from 37.1 per cent in 2001-02 to 18 per cent in 2006-07. The Tenth Plan considers Scenario II as reasonably manageable. Based on Scenario II, imports are expected to increase from $57,618 million in 2001-02 to $ 1,22,846 million in 200607 indicating an average annual growth rate of 16.3 per cent.
The trade balance deficit is likely to increase from $ 12,703 million in 2001-02 to $ 42,427 million in 2006-07. As a percentage of GDP, the trade deficit will rise from 2.9% in 2001-02 to 6.6% in 2006-07.
Regarding net invisible, the Tenth Plan envisages an increase from $ 14,054 million in 2010 to $ 23,716 million by 2006-07, giving an average annual growth rate of 11 per cent. Based on these projections. The tenth Plan estimates the current account balance which was positive by $ 1.,351 million by 2001-02 to turn into negative to the extent of $ 18,711 million by 2006-07. As a percentage of GDP, the current account balance (CAB) would deteriorate from 0.3% in 2001-02 to (-) 2.9% in 2006-07. However, the average CAB for the entire plan period would be of the order of (-) 1.6 per cent of GDP which is manageable to achieve the target of the overall growth of 8 per cent.
Current Account Balance During The Tenth Plan
Source: Planning Commission, Tenth Five Year Plan (2002-07)
Capital account projections give details of external assistance and foreign direct investment to finance the current account deficit. The total inflow of foreign savings in the Indian economy in the capital account is expected to increase from $ 9.545 million in 2001-02 to $ 22,222 million in 2006-07. In the same current account balance will decline from $ 1,351 million to $(-) 18,711 million con there shall be a decline in accretion to our foreign exchange reserves from $ 10,896 million in 2001. 02 to $3.511 million. India’s external debt will increase from $ 2,550 million in 2001.00 undo 122 million in 2006-07.
Here are the notes for eleventh plan.