(Excerpts from Prime Minister Manmohan Singh’s visionary statement at the Full Planning Commission Meeting)
12th Five Year Plan targets a faster, inclusive and sustainable growth. The target is 8.2% growth. The priority areas are the following:
- A rebound in the second half of the current year(2012-13)
- Implementation of infrastructure projects: This is critical for removing supply bottlenecks which constrain growth in other sectors. It will also boost investor sentiment to raise the overall rate of investment.
- Set of Government programmes aimed at achieving specific sectoral objectives – health, education, water resource management, infrastructure development, and a number of programmes aimed at inclusiveness.
- Macro economic balance: To achieve the target of 8.2 percent growth we need to revive investment in the economy. We need foreign investment and the investment environment is therefore critical.
- Set of policies which can improve performance in individual sectors: Health, education, and skill development, Agricultural growth, Manufacturing, Energy,Water, urbanization etc.
The Plan for the first time introduces alternative scenarios.
Scenario one is called “Strong Inclusive growth”. It presents what is possible if the policy actions outlined in the Plan are substantially implemented. One can expect a number of virtuous cycles to start operating, leading to positive results on both growth and inclusion. This is the scenario we should aim for.
Scenario two is called “insufficient action”. It describes a state of partial action with weak implementation. The virtuous cycles that reinforce growth in Scenario I, will not kick in, and growth can easily slow down to 6 to 6.5 percent. Inclusiveness will also suffer. This is where we will end up if we make only half-hearted efforts and slip in implementation. It is my sincere hope that we do not do so.
Scenario three is called “policy logjam”. It reflects a situation where for one reason or another, most of the policies needed to achieve Scenario 1 are not taken. If this continues for any length of time, vicious cycles begin to set in and growth could easily collapse to about 5 percent per year, with very poor outcomes on inclusion. I urge everyone interested in the country’s future to understand fully the implications of this scenario. They will quickly come to an agreement that the people of India deserve better than this.
I believe we can make Scenario I possible. It will take courage and some risks but it should be our endeavour to ensure that it materialises. The country deserves no less.