Tenth Five Year Plan
Objectives, Targets, And Strategy
Background of Developments in the 1990s
The Tenth Plan (2002-07) was prepared against a backdrop of high expectations arising from some aspects of the recent performance. GDP growth in the post-reforms period improved to an average of about 6.1 per cent in the Eighth and Ninth Plans from an average of about 5.7 per cent in the 1980s, making India one of the ten fastest-growing developing countries. Encouraging progress was also made in other dimensions. The percentage of the population in poverty continued to decline, even if not as much as was targeted. Population growth decelerated below 2 per cent for the first time in four decades. – Literacy increased from 52 per cent in 1991 to 65 per cent in 2001 and the improvement was evident in all States. Sectors such as software services and IT-enabled services have emerged as new sources of strength creating confidence about India’s potential to be competitive in the world economy. Objectives of the Tenth Plan: Traditionally, the level of per capita income has been regarded as a summary indicator of the economic well being of the country and growth targets have therefore focused on growth in per capita income or per capita GDP. In the past, the growth rates of GDP have been such as double the per capita income over 20 years or so. Recognizing the importance of making a quantum jump compared with the past performance, the Prime Minister directed the Planning Commission to examine the feasibility of doubling the per capita income in the next ten years. With the population expected to grow at about 1.6 per cent per annum, this target requires the rate of growth of GDP to be 8 per cent over the Tenth Plan and 9.3 per cent during the Eleventh Plan. The Approach Paper proposed that the Tenth Plan should aim at an indicative target of 8 per cent GDP growth for 2002-07. It is certainly an ambitious target, especially because GDP growth has decelerated to around 6 per cent during the last two years of the Ninth Plans. In addition to the 8 per cent growth target, the Tenth Plan also identifies the following specific and monitorable targets for this purpose. Reduction of poverty ratio to 20 per cent by 2007 and 10 per cent by 2012. Ô Gainful employment to the addition to the labour force over the Tenth Plan period.
Universal access to primary education by 2007. Reduction in the decadal rate of population growth between 2001 and 2011 to 16.2 per cent. Increase in literacy to 72 per cent by 2007 and 80 per cent by 2012. Reduction of infant mortality rate ( IMR) to 45 per 1000 live births by 2007 and 28. by 2012. Reduction of maternal mortality ratio ( MMR) to 20 per 1000 live births by 2007 and 10’by 2012. Increase in forest and tree cover ta 25 per cent by 2007 and 33 per cent by 2012. All villages to have access to potable drinking water by 2012. Cleaning of all major polluted rivers by 2007 and other notified stretches by 2012.
Feasibility of 8 per cent Growth
At an aggregate level, any acceleration in growth requires some combination of an increase in gross domestic fixed capital formation and an increase in efficiency of resource use. The latter requires policies that will increase the productivity of existing resources and also increase the efficiency of new investment. There can be little doubt that we cannot hope to achieve 8 per cent growth relying entirely on upon, or even largely, on increased investment.
With the average ICOR in the Eighth and Ninth Plans amounting to around 4.0, the investment increase needed to achieve a 1.5 percentage point increase in growth is 6 percentage points. While some part of this could come from an increase in foreign direct investment, it is unrealistic to expect this source to contribute more than 1 to 1.5 percentage points. This means that if the entire acceleration in growth has to come from additional investment with an ICOR of 4.0, it would be necessary to mobilise between 4.5 and 5 percentage points of GDP through additional domestic savings. An increase in this order may not be feasible. A substantial part of the additional growth targeted must therefore come from ITQIII increased efficiency.
The principal reason why 8 per cent growth may be feasible in the Tenth Plan is that the scope for realising efficiency improvements is large in the public and private sectors. However, this can only be realised if policies ensure such improvement. The Tenth Plan must therefore give high priority to identifying efficiency-enhancing policies at macro and also at sector levels.
The tenth plan emphasizes the need to take measures to reduce idle capital stock so that assets can be used to their full productive capacity. For this, the following measures are suggested in the Tenth Plan.
Full emphasis to be placed on completion of partially completed ‘or -going, projects and up-gradation of existing capital assets before starting new projects. Rapid privatisation of public sector enterprises ( PSES), particularly those, which are working below capacity. . Legal and procedural changes for quick transfer of assets, including such measures as repeal of sick Industrial companies ( special provision) Act (SICA), the introduction of bankruptcy law, facilitating foreclosure, accelerating judicial processes, etc.
Check out these notes on Ways To Achieve Equality And Social Justice – Tenth Five Year Plan.