BBA 2nd Sem. Characteristics of Indian Economy

BBA 2nd Sem. Characteristics of Indian Economy 


BBA 2nd Sem. Characteristics of Indian Economy :- 

Q. 11. What are the basic benefits or suggestions provided in the field of irrigation and energy sector in eleventh five year plan ?

Ans. Irrigation : Only about 37% of the net sown area has irrigation facility leaving large population of farmers particularly the small and marginal farmers to the vagaries of monsoon. The broad strategy and priorities proposed for the Eleventh Plan are to complete ongoing projects, make much more effective use of irrigation facilities created both from existing and new schemes and to improve and restore old irrigation schemes. During Eleventh Plan emphasis has been laid to obtain funds or loans from AIBP, NABARD and multilateral funding agencies like JBIC, World Bank etc. State Govt. has made a provision for such loans in the plan. MPWSRP and creation of Command Area Development Cell in the WRD department will help in enhancing the utilization of created capacities.

It is proposed to create 7.06 lakh hectare additional irrigation potential through irrigation projects to be implemented by the WRD department. 3.56 lakh hect. potential is proposed to be created through the schemes being implemented by NVDA. Besides, substantial irrigation potential will be created through schemes of rural development and agriculture development departments. The watershed development and water conservation programmes will also help develop irrigation potential in the private sector through wells and tube-wells etc. These investments are expected to play a critical role in enhancing growth in agriculture and horticulture in the Eleventh Plan.

Energy : The present installed capacity of MPSEB as on 31.3.2006 is 2,990.45 MW comprising of 2,147.5 MW thermal and 842.95 MW Hydel capacities. Further, it has a share of 1,665.85 MVV in the central sector projects and additional allocation of 50 MW is available from EREB. Apart from the above, 1,000 MW from Indira Sagar HEP and’ 712.5 MW share as on 31.3.2006 from Sardar Sarovar HEP (Inter State) from NV DA is available. The total available power from MPSEB and NV DA is anticipated to be 5509.45 MW at the end of the tenth plan.

Looking to the future load growth and to over come present shortage, efforts have been made to add generation capacity from State Sector, Central Sector, other sectors/ IPPs.


BBA 2nd Sem. Characteristics of Indian Economy
BBA 2nd Sem. Characteristics of Indian Economy

Based on this capacity addition programme, peak availability has been assessed. Peak
requirement, peak availability from 2006-07 to 2011-12 have been worked out as indicated below:

Maheshwar hydro-electric project (10x40MW) is being implemented with private sector participation and is expected to be commissioned in 2010. To take care of future energy needs, 9 MOUs have been signed with the investors for a capacity of 8,800 MW involving an investment of about 37,000 crore. Similarly, a 4,000 MW ultra Mega Power Project is being taken up by Sasan Power Limited, which is a wholly owned subsidiary of PFC. Out of this GoMP has been allocated a share of 1,500 MW of power.

To strengthen and upgrade the transmission and distribution system, a loan of US$ 186.425 Million was obtained during the Tenth Plan and is being utilised. Based on system studies to assess transmission requirements, it is proposed to construct 12,223 Ckt. kms EHV line and add 11,482 MVA capacity of EHV sub-stations during the 11th Plane It is estimated that 3,948.46 crore will be required for this, of which 2,137.31 crore have been proposed under the Plan and the rest are expected to be received as a loan. Further, a scheme has been posed to ADB for second loan to 1,154.26 crore replace crores by crone to be utilized during the 11th and 12th Plan periods. During Annual Plan 2007-08, it is programmed to construct 2,166 circuit KM, EHV lines and add 3,145 MVA capacity of EHV sub station.

Further it is proposed to reduce the T&D loss from 40.16% to 31.46% by the end of the Eleventh Plan. Proposals have been posed under APDRP-II and to PFC for improvement in distribution system. Electrification of villages and households will be taken up through Rajeev Gandhi Grameen Vidyutikaran Yojana (RGGVY). Proposals of about 2,500 crore, for all the districts have been submitted to the GOI for sanction.

Q. 12. Give the suggestions in eleventh five year plan in the improvement of education and health sector.

Ans.                         Education

1. Elementary Education : The strategy in the education sector would be to consolidate the gains of the Tenth Plan under SSA to meet the objectives of increase the literacy rate to 84%, reduce the drop-out rates and reduce the gender gap in school education and literacy by the end of the Eleventh Plan. The state has made tremendous gains in terms of enrolment (nearly 100%) of children in primary schools. A total of 1,12,74,071 children have been enrolled in primary schools and 42,53,269 children have been enrolled in upper primary schools. However a major challenge for the state continues to be addressing the issue of quality education. It is proposed to improve the physical infrastructure and basic amenities like toilets and drinking water in all schools, make effective use of Information and Communication Technology (ICT) in Education and give special focus on disadvantaged children and children with special needs. Key physical targets for the elementary education in 11th Five Year Plan are as follows :

Sarva Shiksha Abhiyan

BBA 2nd Sem. Characteristics of Indian Economy
BBA 2nd Sem. Characteristics of Indian Economy
BBA 2nd Sem. Characteristics of Indian Economy
BBA 2nd Sem. Characteristics of Indian Economy
BBA 2nd Sem. Characteristics of Indian Economy
BBA 2nd Sem. Characteristics of Indian Economy

The main reason for higher drop out rates in some parts of the state like, Jhabua, Badwani, Satna and some other tribal areas is migration of the families for employment to other areas. To improve the condition, the T WD is making efforts to increase the number of Ashram Schools and Hostels.

2. Secondary Education : The successful implementation of Sarva Shiksha Abhiyan (SSA) has resulted in increased number of pass-outs of Class 8 and big demand for expansion of secondary education facility in the state. In the coming years, the completion rate in elementary education will increase and there will consequentlv be more children who will require secondary education facility.

The projected enrolment in the coming years in Class 8 & 9 will be as follows :

In order to meet the increasing demand, the existing infrastructure facilities will have to be expanded and new schools will need to be opened.

At present, there are 2.6 schools per 100 sq. kma, which is about 45 % lower than the average national density. The State has already conducted a survey in the year 2001-02 to map therequirement of secondary schools (Class 9 & 10) within a radius of 5 km of each habitation.
According to the survey, there is need to open 3,115 new high schools. Since the contribution of the private schools is mainly in urban areas, the State Government will have to shoulder the major part of the responsibility for opening new schools in rural areas.  At present, there are large gender and social equity gaps in the secondary education sector. The percentage of girls’ enrolment in the high schools (Classes 9 & 10) is merely 36.30, percentage of enrolment of SC children is 14.77 as against their population share of 15.40% and the percentage of ST children is 10.47 which is half of their population share of nearly 20.3%. The State Government is providing incentives to bridge these equity gaps. Free bicycles are being provided to the girls who enroll in Class 9 in the government schools located in other villages. Besides the scholarships and incentives on joining class 9 to SC and ST students, free text books are given to the students belonging to the SC, ST & Below Poverty Line (BPL) families.

Expansion of secondary education facility, providing quality education, promoting girl’s education to bridge the gender gap, improve infrastructure facilities and use of ICT in secondary school education are the key objectives for secondary education. With available resources, it is proposed to upgrade 580 upper primary schools/high schools to high schools/ higher secondary schools, provide bicycles to 6,50,000 girls from SC, ST and BPL families, provide free text books to nearly 50,00,000 students and provide Information Technology Enabled Learning and Literacy (IT ELL) or ICT @ school in about 1100 schools. The achievements will be much better if the SSA-2 takes off at the earliest.

Health : The state is still considered as one of the backward states the at the national level in respect of health indices. The maternal mortality and infant mortality rates in the state are very high as compared to the other states in the country. The Eleventh Plan for Health Sector is basically devoted to lower the IMR, MMR and to reduce the fertility rate, The Janani Suraksha Yojana under NRHM is being implemented effectively to enhance institutional deliveries to reduce the maternal and infant deaths. The two schemes like Prasav Hetu Parivahan Avam Upchar Yojana and Vijaya Raje Janani Kalyan Yojana are also being implemented to enhance institutional deliveries. These efforts have helped to increase the institutional deliveries in the state from 26% to 50%. Private institutions are also being accredited for rendering maternal and child care and delivery service.

To provide health care services in remote parts of the state, mobile health clinics are operational in 11 blocks of the state with the help of private/NGO participation.

To provide quality health care to the poor, the State is providing free treatment upto 20,000 to all BPL families under Deendayal Antyodaya Upchar Yojana. Family health cards are being given to about 50 lakh BPL families, who will be benefitted under this scheme.

To improve access and quality of health care, it is proposed to establish 600 Sub-Health Centres, 250 PHCs and 60 CHCs during XI five year plan. Simultaneously, expansion of 30 district and civil hospitals, provision of 200 X-ray machines in CHCs and blood storage facilities in about 180 CHCs will be taken up during the Plan.

To improve physical infrastructure and quality of services, to reduce absenteeism and to improve emergency response, it is also proposed to provide hospital buildings and residential facilities for medical and para-medical staff in all the PHCs and CHCs.

The state has been a pioneer in preparing integrated district health action plans to converge efforts and resources to influence all key determinants of health within and outside of health sector.

Besides RCH programme, the thrust will be on other key national programmes like Revised National Tuberculosis Control Programme (RN TCP) and National Anti-Malaria Programme and National Aids Control Programme to combat major killer diseases.

Q. 13. Give a detailed note on the welfare of SC/ST and women and child development in eleventh five year plan.

Ans. Welfare of SC/ST : Social, economic and educational development and empowerment of socially disadvantaged groups and bringing them at par with the rest of the society is a high priority for the state government. Education is one of the most important instruments of social and economic empowerment, Schemes for the educational upliftment of SC/ST have borne fruits but still the gap between the general and SC/ST population is at un-acceptable levels. The state has a 15.17% SC and 20.27% ST population, The schemes of welfare of these section of the society include strengthening and improvement of educational facilities through supply of free text books, scholarships enhancement in stipend, improvement of hostels, development of excellence schools and hostels and distribution of cycles to the girls entering 6th and 9th class in another village. Promotion of literacy in tribal communities in general and ST girls in particular in low female literacy pockets and in P TG areas is proposed to be done by converting 150 elementary schools into Ashram Schools School and Hostels of excellence at district and block head quarters will also be strengthened to provide quality education. To provide nutritive food to students living in hostels and ashrams, the rate of stipend is being increased from 350/- to 500/7 for males and fronR 360/- to 525/- per month for females.

Besides economic schemes that directly benefit SC and ST farmers like construction of wells, pump energisation, electrification of households, Eklavya IT Is and Pölytechnics for ST students and Dr. Ambedkar IT Is and Polytechnics for SC students are proposed to be established under the Eleventh Plan. The funds through Special Component Sub Plan for SCS and Tribal Sub Plan for STS and special assistance received under article 275 (i) of the constitution would be utilized to improve their condition to bring them at par with the general population.

Although the economic and educational schemes for STS and SCS are fairly similar in nature, there are specific social empowerment schemes for STS & SCs. The proportion of plan allocation for TSP and SCSP in year 2007-08 is 22.86% and 15.26% respectively and in 2007-12 is 22.69 % and 15.92% respectively. This is slightly higher than the proportion of their population.

Women and Child Development : The state government accords high priority to socio-economic development of women so that they become equal partners in development process. The Government is introducing gender budgeting in 13 departments in 2007-08 to assess the allocation of resources gender-wise and to see the impact of policies and programmes on gender. The government has been providing free textbooks, uniforms, scholarships and free bicycles to girl children entering classes VI and IX. To promote eddcational and socio-economic status of the girl child, the government has decided to introduce a new scheme called Ladli Laxmi Yojana. 30,000/- will be deposited in five equal installments OR 6,000/- each in NSCs or any other similar instrument in the name of a girl child, After completion of 21 years of age, a lump sum amount of about one lakh will be paid to the girl child provided she appears in 12t class examination and gets married after18 years of age. Certain amount will also be paid to her when she takes admission in 6 , 9 and 11th class. Approximately 600 crores will be spent under the scheme during 11th five year plan.
Development of special education zone for women and creating Help Centres to provide counseling and support to victims of domestic violence are other new schemes being introduced. State Government has also launched a ‘CM Kanyadaan Yojana’ for organizing group marriages of destitute, girls from poor families, divorcees and widows. Under the scheme, 5000 is provided to the prospective bride for household material and 1000 per case is provided to the Sponsor for making arrangements for group marriage, Similarly, survival, growth and development of children to their fullest potential is critical for healthy and productive society of tomorrow and therefore, government is seriously concerned about high child mortality, morbidity and malnutrition. The State has one of the hichest levels of malnutrition among children and anemia in women in reproductive age group in the country. To prevent, control and manage rnalnutrition amongst children, the state government launched the state-wide Bal Sanjivani campaign. Under the campaign, the weight of all children below 5 years is monitored at 6 month’s interval to track their growth. This is followed by focused attention on severely nourished and malnourished children through nutritional and health counseling and treatment under Bal Shakti programme. Under Bal Shakti programme, severely malnourished children of grade 3 and grade 4 are provided free medical treatment through hospitalization and during the period of hospitalization, the parents of the malnourished child are imparted nutrition and health counseling. As a result of this campaign, severe malnutrition in the state came down dramatically from 5.7% in the year 2001 to 0.96% by 2006. Vitamin A is also being provided to children during this campaign. To reduce anemia, IFA Tablets are being provided to women and access and quality of services and nutrition inputs under ICDS, the state government has decided to alloq self help group (SHGS) and Mother’s Committees to provide a larger variety menu (17 items) as supplementary nutrition to children and pregnant and lactation mother at enhanced cost of @ 2/- Per beneficiary. To improve ANC care and utilization of material child health services, a new scheme is being launched in the 11th plan to celebrate four mangal Divas by the name of janam Divas, God Bharai Divas, Kishori Balika Divas and Anna Prasan Divas every month in each of the Aanganwadis. The nutrition will be provided by SHGs/Mother’s Committees.

Special Nutrition Program in 1000 Villages : A new scheme under nutrition programme “Adiwasi Kshetron Mein Vishesh Poshan Aahar Yojana” is being introduced in the Eleventh Five Year Plan to provide nutritional food three times a day to severely malnourished children registered in Anganwadi centres in identified malnourished clusters of 25 villages each in tribal areas of Certain districts. These Aanganwadi centres will remain open for 6 hours instead of 4 hours a day. Approximately 8.5 crore per annum will be spent on the scheme.


Q. 14. Write salient features of eleventh five year plan in :

1. Transport sector.

2. Tourism.

3. Other sectors.


1. Transport Sector

The social, economic and poverty profile of M.P. is such that the quality of infrastructure is a bottleneck for more rapid and equitable growth in the state and thereby growth in human development. The infrastructure backward regions also correspond to where the poorest reside and the human development deficit is maximum. Improving the rural connectivity and quality of road network is thus a key priority of the state government. Against an original outlay oft 1,325 crore, the state government actually provided 3,058 crore in the Tenth Plan. Despite significant investments in the road sector in last three years, the road network of the state as compared to other states is still very poor. The national average for road network is 74.9 km/ 100 Sq. km whereas in M.P. it is only 4511 km/ 100 Sq. km. This is not only an indicator of the backwardness of the state but also the cause of its backwardness.

In order to bridge the gap to some extent, it is proposed to construct Road length of 21,587 km, 101 Major bridges, 79 medium bridges, 5 railway over bridges during Eleventh Plan. In addition, it is proposed to construct about 20,000 km of road under Pradhan Mantri Gramin Sadak Yojana. To improve the functioning and carry out the works in a project mode, a new Company/Corporation namely, M.P. Road Development Corporation was created in July, 2004. Presently MPRDC is working on 49 Road Projects having Road length of 4420 km.

An outlay of? 7,770.00 crore and 1,599.65 crores has been proposed for the Eleventh Five Year Plan 2007-12 and Annual Plan 2007-08 respectively as against an outlay oft 1,325.00 crore in the Tenth Plan and 885.23 crore in 2006-07.

Besides the public sector investments, M.P. has been pioneer in Public Private Partnership mode of constructing road infrastructure. Five road projects covering a length of 525.64 km• costing 1,519.12 crore were recently bid out and will be developed with GOI assistance under Viability Gap Funding. ‘In fact, in Jaora-Nayagaon road negative premium will be paid by the developer annually.

Missing Links : Under PMGSY, the construction of all weather roads is not permitted if the villages are less than 500 meter away from the main route/road. Such left out roads and bridges will be covered and connected under the scheme with state support. Providing such connectivity is very cost effective. During annual plan 2007-08, a provision OR 25 crore has been made to begin with construction of such missing links.

2. Tourism

Madhya Pradesh is known for its rich heritage, legendary pilgrim centres, breathtaking scenic beauty and unparalleled wildlife. Tourism has significant potential for employment generationa. A dynamic mechanism is being put in place to remove bottlenecks for the private sector participation in promoting tourism and developing tourism infrastructure. The construction of road network linking major tourist centers has been taken up for up-gradation.

3. Other Sectors

(i) Public Private Participation : The state has been a pioneer in Public Private Partnership (PPP). So far, over 1600 km. roads have already been constructed through this route. Road projects costing over 1500 crore and projects in the areas of urban transport, industrial water supply, health etc, through PPP are in the pipeline. The state has also adopted the policy for development of mini-hydel projects on PPP model. The state has also been among the first ones to submit proposals of road construction using the VGF- The state is thus trying to utilize PPP approach for funding infrastructure development wherever possible.

(ii) Decentralised Planning : Madhya Pradesh has been a pioneer in decentralized planning. It
has been getting District Plans prepared by the DPCs from 2002-03 onwards. About 37.07% of the proposed state plan outlay for Annual Plan 2007-08 has been ear-marked for District plans. The District sector outlay is allocated to various Districts through a formula based on 7 points criteria like population, literacy, area etc. Each district prepares its District plan in consultation with the PRIS and ULBs and is approved by the DPC. These plans are brought to the state level and after detailed consultations in the working groups they are approved by the State Planning Board. These approved plans are inclüded into the budget,

(iii) Rationalisation of Schemes : The State Planning Board undertook an extensive exercise to rationalize the schemes and programmes under the plan. The schemes of non-plan nature were moved to non-plan. The schemes with no or poor impact were discontinued. Schemes of similar nature and similar broad objectives were clubbed under one main scheme with multiple
components that accommodate the existing schemes. As a result of this exercise, 288 schemes out of a total of 928 schemes have been either discontinued or clubbed together or moved to non-plan. A total of 218 new schemes have been proposed in the Eleventh Plan.

(iv) Strengthening Public Expenditure Management : The state has enacted the Fiscal Responsibility and Budgetary Management (FRBM) Act, 2005. The Act requires the government to fix rolling targets for fiscal indicators including fiscal and revenue deficits. Besides ensuring fiscal discipline, the government is also keen to ensure effective and efficient utilization of allocated resources. Accordingly, outcome budget is being prepared and is placed before the State Legislature. For strengthening links between policy, planning and budgeting and to achieve more effective and efficient use of public resources so as to bring about poverty reduction and human development in Madhya Pradesh, with the help of Planning Commission and DFID, GOMP has decided to implement the project entitled “Strengthening performance management in government of Madhya Pradesh.” To achieve the purpose, the project will :

1.    Build capacity within GOMP to prepare a strengthened Medium-Term Fiscal Framework (MTFF) and Medium-Term Expenditure Framework (MTEF) in selected line departments. 2.    Strengthening of departmental capacity to set goals and strategies and allocate resources to target poverty and promote human development more effectively.3.    Strengthen the pro-poor focus in resource planning and allocation by building capacity in gender budgeting.4.    The project will support eight selected departments namely : School Education, Health, Public Works, Water Resources, Tribal Welfare, Agriculture, Rural Development Department and Urban Administration Department.  The key project components are :

1.    Medium-Term Expenditure Frameworks : The MT EF will detail all the resources expected to be received over the period of 3-5 years, making allocations to departmental programmes based on sectoral goals and objectives. Finance Department will also develop key performance indicators against goals and objectives linked to the expenditure plan.

2.    Public Sector Enterprises (PSE) Restructuring : To enable GOMP to unlock resources that can be channeled to support welfare spending, the project will support the legal closure of five non-functioning (PSEs) and a diagnostic review of a further 22 PSEs. In the latter case, project support will be limited to presenting options to government for restructuring.

3.    Poverty Monitoring, Policy Support, and Improvements in Monitoring & Evaluation (M&E) Systems : The Poverty Monitoring and Policy Support Unit (PMPSU) will be organised as a registered society under the administrative control of the Madhya Pradesh State Planning Board. The Unit will undertake specialised research on issues relating to state-level poverty, inequality, gender and social exclusion, to be shared within and outside Government to help devise better policies and programmes.

4.    Procurement and other Activities Relating to Improvement in Public Expenditure Management (PEM) : The project will support a review of state procurement systems and proposed procurement legislation and options for effective implementation. It will support capacity building in the Finance Department to enable it to advise line departments on engaging with the private sector for the delivery of public services and review existing financial systems, including internal audit. Improved PEM will enable GOMP to address poor performing Human Development Indicators more effectively, contributing towards the achievement in India of the Millennium Development Goals.

5.    Improvement in Governance : The State Government realizes that effective, efficient, accountable and responsive governance is critical for growth and development in all sectors. The government recently organized a two-days brainstorming session called Manthan, in which the entire cabinet led by the Chief Minister and all the Secretaries and HODs, Commissioners, Collectors and Chief Executive Officers of Zila Panchayats participated to deliberate on solutions to address key challenges being faced by the people and government of the state. Many useful and practical recommendations emerged from these deliberations. The government haseconstituted four sub-committees to operationalise, and follow up the recommendations. On the basis of one such recommendation, the government has decided to set up a ‘School of Good Governance and Policy Analysis’ in Bhopal. The school will not only be the repository of knowledge but will actively disseminate good practices and facilitate brainstorming to address critical challenges. Similarly, a provision has been made to encourage innovations during the currency of plan period. Creative ideas generated at the field level or by a department could be supported under the plan on a pilot basis. On the basis of evaluation and experience of the pilots, the government could decide to expand the pilot project to the state as a whole with such modification as may appear necessary. This will encourage the evidence based policy and programmes.

BBA 2nd Sem. Characteristics of Indian Economy
BBA 2nd Sem. Characteristics of Indian Economy
BBA 2nd Sem. Characteristics of Indian Economy
BBA 2nd Sem. Characteristics of Indian Economy
BBA 2nd Sem. Characteristics of Indian Economy
BBA 2nd Sem. Characteristics of Indian Economy
BBA 2nd Sem. Characteristics of Indian Economy
BBA 2nd Sem. Characteristics of Indian Economy
BBA 2nd Sem. Characteristics of Indian Economy
BBA 2nd Sem. Characteristics of Indian Economy

 Q. 16. Discuss the 12th Five Year Plan from myth to reality for exclusive development.

Ans. The Planning Commission of India posted the draft documents of the 12th Five Year Plan on its website in the first week of December 2012 for feedback from the public before it is adopted by the National Development Council (NDC) on 28 December and declared the Five Year Plan for the country from 2012 to 2017. The stated vision of the Plan Document is “India moving forward in a way that would ensure a broad-based improvement in living standards of all sections of the people through a growth process which is faster than in the past, more inclusive and also more environmentally sustainable”. This mantra of “faster, sustainable and more inclusive growth” is indeed ideal and laudable, but the question is how can we make it possible? More importantly, what could be the consequences if we fail?

Planning Commission of India first started talking of inclusive growth” as on objective while formulating the 11th Five Year Plan which was in operation from 2007 to 2012. But we find that while this 11th Plan succeeded in achieving a remarkable rate of growth, it also witnesses impoverishment and exclusion of large sections of the populations form benefits of development. This was because of the singular focus of the planners on growth and not on distribution with the assumption that accelerated growth would trickle down to benefit all. Unfortunately this has not happened. On the contrary, the disparities seem to have increased.

11th Plan: Exclusion and Deprivations

Despite an average 7.9 per cent growth in GDP (Gross Domestic Product) during the 11th Plan Period. Sometimes peaking to 9 per cent the performs of India in terms of the Human Development Index (HDI) (indicative of inclusive growth and the extent of population benefiting from development) saw a downward slide from 128th and 127th positions in 2000 and 2005 respectively to 134th position in 2009 and 2011. While a handful are reaping benefits and have entered the billionaires club, millions are being forced into deprivation and disempowerment. For the first time in history, four Indians found a place among the 10 richest people of 2009, but three out of every ten poor people in the world in the same year were also Indians-an unusual phenomenon of continuing poverty and marginalisaion in the midst of galloping plenty.

While Planning Commission of India accepts GDP as a measure for assessing growth, it has not taken any steps to adopt any tool to quantitatively measure “inclusive growth”. Models and measures are indeed available to determine inclusivity of growth in the from of Gini Coefficinet (the measure of income inequality) and HDI (Human Development Index) etc., but what seems to be lacking ‘is the appropriate development philosophy and political will to adopt them. With such systemic privileging of “growth” and gross omission of any measure to assess ‘(inclusion”, our planning process has taken a trajectory that has resulted in the doubling of inequity in incomes in India during the last 20 years, making it the worst performer on this count of all emerging economics according to a report of OECD (Organisation of Economic Cooperation and Development) released in December 2011. The OECD report further shows that the top 10 per cent wage earners in India now make 12 times more than the bottom 10 per cent. Ironically, this was also a period when the GDP of the country started increasing ae an unprecedented rate making it one of’ the fastest growing economics in the world.

Conflicts : A Product of Inequity and Marginalisaion

The deprivation and exploitation of millions Of poor seems to be turning them against the system as they find themselves more and more excluded from the benevolent and Protective character of the State. This disenchantment and exclusion of the masses is getting translated into a variety of social and political conflicts and manifests itself as agitations, riots resistance’ militancy and even demands for secession organised around caste, class, communal, regional and ethnic lines Already one-third of the country is afflicted by some form of serious conflict due to the expoitative and unsustainable philosophy of growth we seem to be pursing. Even the Planning Commission has explicitly stated in its Plan Documents for the 12th Year Plan that ‘ ‘agitations around land acquisition, deforestation, water use, air and water pollution, and also our response to natural disasters have become more and pose challenges which this plan must address squarely.”

If left unaddressed, all these conflicts could lead to increased violence between more and more groups and communities, set ablaze most of the country and have the potential of brining down the legitimacy of the state and cause irreversible damage to the national polity, Hence, it is imperative that any planning process of the State should also focus on deliberations about how development in different spheres is contributing to generation/enhancement of conflicts and explore the possibility of using the planning process for mitigation of conflicts rather than provide conditions for their accentuation as seems to be the case now.

Adoption of Multiple Parameters

The Plan Documents asserts that “our focus should not be just on GDP growth itself , but on achieving a growth process that is as inclusive as possible” and rightly accepts that “strong inclusive growth is the only scenario that will meet the aspiration of the people”. But in terms of its approach and methodology, it unfortunately continues its primary focus on providing impetus to “growth” (fixing a target of achieving 9 per cent GDP growth), but adopts no methodologies to measure and monitor “inclusive growth” despite explicitly mentioning that “the extent of inequality is measured by indices such as the Gini coefficient”. If the Planning Commission is indeed serious and honest about “inclusive growth” then it should also fix targets for Gini coefficient, HDI and other such measures also. Otherwise it would appear that “inclusive growth” is being used more as a slogan for effect than a parameter for the planning process.

12th Plan Dedicated to Mother Earth

It is rightly said that growth for the sake of growth is the philosophy of a cancer cell. Whether we are RBCs (Red Blood Corpuscles) or cancer cells for Mother Earth, the option can change with the 12th Plan. All that is requires is a politics oriented towards the Underprivileged a will that can resists corporate greed and the power of international capital.

Q. 17. Discuss the growth prospects of the current 12th Five Year plan and describe its alternative scenarios.

Ans. The approach paper to the 12th Plan, approved by the National Development Council (NDG) in 2011, had set a target of 9 per cent average growth of GDP over the plan Period. That was before the Eurozone crisis in that year triggered a sharp downturn in global economic prospects and also before the extent of the slowdown in the domestic economy was known. A realistic assessment of the growth prospects of the economy in the 12th Plan period can be Seen in Various phenomena. It concludes that the current slowdown in GDP growth can be reversed through strong corrective action, including especially and expansion in investment with a corresponding increase in saving to keep inflationary pressure under control. However, while our full growth potential remains around 9 per cent acceleration to this level can only occur in a phased manner, especially since the global economy is expected to remain weak for the first half of Plan Period. Taking account of all these factors, the 12th Pian should work towards bringing GDP growth back to and inclusive 9 per cent in the last two year of the Plan, which will yield an average growth rate of about 8 per cent over the entire plan period. The outcome is conditional on many policy actions.

Within the aggregate GDP growth target, two sub-targets are especially important for inclusiveness. These are a growth rate of 4 per cent for the agricultural sector over the 12th Plan period and for the manufacturing sector.

The 12th Plan’s strategy for growth depends crucially on productivity gains as one of the key drivers of growth. Productivity is the additional contribution to growth after taking account of the effect of capital accumulation and growth in labour. These traditional sources of growth are not ‘likely to be enough for India in the coming years and we must therefore focus much more on productivity improvements among all constituents : big businesses, MSMEs, farmers and even government. This can be done by improving the business regulatory environment, strengthening the governance capacity of States, investing more in infrastructure rather than subsidies, and by using science and technology to drive innovation.

Alternative Scenarios

The projection of 8 per cent growth in the 12th Plan period should not be viewed as a ‘business as usual’ outcome that can be realised with relatively little effort. It is in fact a projection of what is possible if we take early steps to reverse the current slowdown and also take other policy actions needed to address other key constraints that will otherwise prevent the economy from returning to a higher growth path. Failure to act firmly on these policies will lead to lower growth and also poorer outcomes on inclusiveness.

To illustrate the consequences of inaction on key growth promoting policies, the Planning Commission has undertaken a systematic process of ‘scenario planning’ based on diverse views and disciplines to understand the interplay of the principal forces, internal and external, shaping India’s progress. This analysis suggests three alternative scenarios of how India economy might develop titled, ‘Strong Inclusive Growth’, ‘Insufficient Action’ and ‘Policy Logjam.’

The first scenario ‘Strong Inclusive Growth’, describes the conditions that will emerge if a well-designed strategy is implemented, intervening at the key leverage points in the system. This in effect in the scenario underpinning the 12th Plan growth projections of 8 per cent, starting form below 6 per cent in the first year to reach 9 per cent in the last two years. The second scenario ‘Insufficient Action’ describes the consequences of half hearted action in which the direction of policy is endorsed, but sufficient action is not taken. The growth in this scenario declines to around 6 per cent to 6.5 per cent. The third scenario ‘Policy Logjam’, projects the consequences of policy -Inaction persisting too long. The growth rate in this scenario can drift down to 9 per cent to 5.5 per cent.

Ours is a diverse society and also an argumentative one. We are suspicious when decisions that affect us are not taken transparently and we resent too much centralisation of decision-making. But we all believe in democracy, we respect the views of others and, although we may disagree, we admire and learn form those who work together to offer any vision of a better India. We need to do more to build a greater consensus arpund a common national goal.

The 12th Plan should aim at a growth process that preserves emphasis on inclusion and sustainability while minimising downside effects on growth. Plans are traditionally viewed as being

about what governments should do, but that is narrow view since most investment today is private, and much of that is corporate. This 12th plan must provide a competitive environment in which the private sector, including the corporate sector but also India is fortunate that it is richly endowed in entrepreneurial talent. At a rough estimate, the number of non-agricultural establishments in the country increases by about 8 million every 10 years. While many of these enterprises are very small and reflect basic survival strategies, many are not. The past decade has shown the dynamism that is possible in this sector the dynamism that is possible in this sector under the right Circlimstances  Many of the leading corporate today belonged to the MSME category at the turn Of the century. In this context, the 12th Plan’s overarching priority on developing human capital can’ with the Proper prioritisation of infrastructure and with innovative use of technology and finance’ unleash a truly inclusive growth story.

This inclusive strategy involves a much greater role of the states, and closer coordination between the Center and the states, than would be needed for a purely corporate-led growth Startegy, This is because most of the policy measures and institutional support required for small and medium entrepreneur growth lie in the domain of state governments and local bodies. The Centre’s contributions would lie mainly in creating the appropriate macroeconomic framework, financial sector policies and national level infrastructure.


Q. 18. More effective process of urbanisation has to be done in the current five year plan, How? Discuss various monitorable targets for the referred plan.

Ans. More effective management of the process of urbanisation in the country will be critical for more inclusive, more sustainable and faster economic growth. Urbanisation is a natural part of the development process because cities provide substantial economics of scale and of agglomeration. In India the cities are also effective drivers of inclusiveness because barriers of castes, creed, and language are bridged in interconnected efforts by residents to earn better livelihoods. At present, about 31 per cent of the population, that is, about 400 million, live in urban areas and this will increase to about 600 million by 2030. Providing reasonable quality services to the growing urban population presents a major challenge. Urban services are very poor, particularly sanitation, solid waste removal, water, roads and public transportation. Affordable, decent housing is woefully inadequate in all Indian cities leading to the formation of slums, health and living conditions in which are aggravated by poor water and sanitation services.

The Jawaharlal Nehru National Urban Renewal Mission-II (JNNURM-II) was a landmark initiative because it put India’s urban agenda at center stage. It set about providing resources to the States linked to incentives for reforms which would trigger to focus on improvements to cities and towns. The seven year’s experience with JNNURM has been a substantial learning experience which has also revealed weakness in the governance systems and the capabilities of cities, states and even the Center to manage the process of urbanisation. Urban governance is very week, with poor coordination amongst the many agencies that must work together to create and maintain good functioning habitats. Personnel and institutional capabilities for urban management have to be developed on a massive scale across the country. Capabilities for planning locally are woefully inadequate, which is leading to project not aligned with local priorities and poor coordination amongst separate initiatives.

Since overall government resources are limited and must be applied to other priority sectors such as health and education, it is necessary that cities, especially the larger ones, and progressively even the smaller ones, are encouraged and enabled to draw resources from the market and the private sector. For this, they must improve their governance and ability to implement projects. They will also have to manage their land resources more strategically, both to ensure better land use and to secure what will be a principal resource for their future financial needs. They must become able to recover adequate service charges, and equitably, from their inhabitants, which will require them to demonstrate and ability to deliver better and more reliable services. The Concept of pppps, which systematically put local citizens into the partnership framework must be applied.


Various Monitorable Targets for the Plan

To focus the energies of the government and other stakeholders in development, it is desirable to identify monitor able indicators, which can be used to track the progress of our efforts. Given the complexity of the country and the development process, there are a very large number of targets that can and should be used. There is a core set Of indicators which could form the objectives towards which all development partners can work, which includes not only the Central and state governments, but also local governments, CSOs and international agencies.

Twenty-five core indicators can be listed which reflect the vision of rapid, sustainable and more inclusive growth:

Economic Growth

I. Real GDP Growth Rate of 8.0 per cent.

2. Agriculture Growth Rate of 4.0 per cent.

3. Manufacturing Growth Rate of 10.0 per cent.

4. Every State must have and average growth rate in the 12th Plan preferably higher than that achieved in the 11th Plan.

Poverty and Employment

5. Head-count ratio of consumption poverty to be reduced by 10 percentage points over the preceding estimates by the 12th Five Year Plan.

6. Generate 50 million new work opportunities in the non-farm sector and provide skill certification to equivalent numbers during the 12th Five Year Plan.


7. Mean years of schooling to increase to seven years by the end of 12th Five Year Plan.

8. Enhance access to higher education by creating two million additional seats for each age cohort aligned to the skill needs of the economy.

9. Eliminate gender and social gap in school enrolment (that is, between girls and boys, and between SCs, STS, Muslims and the rest of the population) by the end of 12th Five Year Plan.


10. Reduce IMRto 25 and MMR to 1 per 1,000 live births, and improve Child Sex Ratio (0-6 years) to 950 by the end of the 12th Five Year Plan.

11. Reduces total fertility rate to 2.1 by the end of 12th Five Year Plan.

12. Reduce under-nutrition among children aged 0-3 years to halt of the NFHS-3 levels by the end of 12th Five Year Plan.

Infrastructure, Including Rural Infrastructure

13. Increase investment in infrastructure as a percentage Of GDP to 9 year per cent by the end of 12th Five Year Plan.

14. Increase the gross irrigated area from 90 million hectare to 103 million hectare by the end of 12th Five Year Plan.

15. Provide electricity to all villages and reduce AT&C losses to 20 per cent by the Five Year plan.

16. Connect all villages with all-weather roads by the end of 12th Five Year Plan.

17. Upgrade national and state highways to the minimum two-lane standard by the end of 12th Five Year Plan.

18. Complete Eastern and Western Dedicated Freight Corridors by the end of 12th Five Year Plan.  19. Increase rural tele-density to 70 per cent by the end of 12th Five Year Plan.

20. Ensure 50 per cent of rural population has access to 40 Ipcd piped drinking water supply, and 50 per cent gram panchayats achieve Nirmal Gram Status by the end of 12th Five Year Plan.

Environment and Sustainability

21. Increase green cover (as measured by satellite imagery) by 1 million hectare every year during the 12th Five Year Plan.

22. Add 30,000 MW of renewable energy capacity in the 12th Plan.

23. Reduce emission intensity of GDP in line with the target of 20 per cent to 25 per cent reduction over 2005 levels by 2020.

Service Delivery

24. Provide access to banking services to 90 per cent Indian households by the end of 12th Five Year Plan.

25. Major subsidies and welfare related beneficiary payments to be shifted to a direct cash transfer by the end of the 12th Plan, using the Aadhar ‘platform with linked bank accounts.

Q. 19. Discuss the three critical features for analysis of scenarios in 12th Plan.

Ans. Economists, such as Noble Laureates Douglass North and Elinor Ostrom have explained that ‘institutions’ are both guiding ideas and norms of societies as also the ‘organisations’ with significant roles in governance. These combinations are as ‘Governance Models’ and ‘Business Models’. The analysis of scenarios for India has revealed three critical features of governance and business models that are impacting the pace of inclusion, equitable use of our natural resources, environmental sustainability and economic growth. These are :

1. The approach we take to ‘Inclusion’: More subsidies or more widespread generation of
opportunities for better livelihoods.

BBA 2nd Sem. Characteristics of Indian Economy
BBA 2nd Sem. Characteristics of Indian Economy

2. The approach we take to ‘Governance’: Will we strengthen local, community-based and collaborative governance rapidly?

3. The strategies we adopt towards energy and environment (as well as structure of programmes and enterprises): Big projects and centralised programmes, or more community-based solutions and enterprises.

scenarios are not predictions. They are projections of plausible outcomes of alternative courses of action. They point to strategies that have more likelihood of producing the desired results. Therefore, depending on the strategies we choose and implement, we can envisage different outcomes for the country’s progress, Three alternative scenarios are described in the following paragraph .

Scenario 1

Strong Inclusive Growth : This is the future of India if we can implement a well-designed strategy addressing the key constraints holding back the economy. With appropriate steps taken to deal with implementation and governance problems, the wheels of government at all levels begin to move more smoothly. Local governance institutions and small enterprises are nurtured and have an opportunity to grow effectively, along with larger enterprises. Livelihood opportunities, along with community based solutions and enterprises for addressing environmental issues, are seen to be sprouting. Many virtuous circles begin to operate in this scenario, raising confidence and trust. In this scenario, growth could average 8.0 per cent and inclusiveness would be assured.

Scenario 2

Insufficient Action : This scenario reflects the outcome of insufficient policy action. While broad direction of policy may be endorsed at different levels, action is incomplete or implementation is poor, with the result that outcomes are weaker than anticipated. Centralised government system do not provide sufficient flexibility to cope with demands for decentralisation. Small enterprises and new entrepreneurs need to be encouraged, but unless the business environment necessary for them to flourish is effectively transformed, the outcome will fall short of expectations. The policy conflict between subsidies and financial stability of the economy remains unresolved. In this scenario, growth of 8.2 per cent is not feasible. Growth could decline to between 6 per cent and 6.5 per cent, and inclusiveness would suffer.

Scenario 3

Policy Logjam : This scenario reflects a situation where very little can be done for whatever reason on many of the policy fronts identified in the 12th Plan: It will be difficult to build growth momentum if critical supply constraints relating to energy and transport are not overcome. Investor confidence is likely to be severely eroded, and the lack of inclusiveness that results will lead to increased impatience and political logjam, putting the economy under severe stress. Vicious cycles begin to operate and the growth rate can drift down to 5-5.5 per cent with serious loss on the inclusiveness front. In some ways, there is a danger of insufficient action scenario degenerating into a policy logjam scenario, if it persists too long.

Ciparly, Scenario 1: Strong inclusive growth is the only way for the country to go and the policy agenda laid out in the Plan is designed to achieve this objective. The outcomes of the three scenarios, in terms of the pace of inclusion, the confidence of people in country’s institutions, as also the government’s finances and the GOP, are not easily quantified, but their broad direction can be clearly seen. More information is available in the document, ‘Scenarios: Shaping India’s Future’, that accompanies this plan document, and is posted on the Planning Commission’s website. It is difficult to predict what the precise impact of different scenarios on poverty will be. However, past trends indicate what’ strong inclusive growth’ can achieve on this front. Consumption Poverty in India is measured on the basis of household consumption survey, conducted quinquennially (after a gap of every five years). Evidence suggests decline in poverty headcount ratio between 2004-05 and 2009-10 was twice as fast as that between 1993-94 and 2004-05,

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Montey Parjapati




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