Appraisal Document of Twelfth Five Year Plan 2012-17

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Appraisal Document of Twelfth Five Year Plan 2012-17 APPRAISAL DOCUMENT OF TWELFTH FIVE YEAR PLAN 2012-17 NITI Aayog National Institution for Transforming India www.niti.gov.in Arvind Panagariya Vice Chairman, NITI Aayog Foreword The exercise of appraisal of the Twelfth Five Year Plan (2012-17) was undertaken as a follow up of the decisions taken at the first meeting of the Governing Council of NITI Aayog on 8th February 2015.This Appraisal assesses the performance during the first four years of the plan and spells out policy-or implementation- related changes aimed at furthering the development agenda of the nation. It broadly covers physical and financial achievements during the first four years of the Plan (2012-13 to 2015-16) vis-à-vis the targets. Where appropriate, it also discusses Budget Estimates for the terminal financial year (2016-17). In a significant departure from the past, this appraisal does not take a chapter-by-chapter approach. Instead, it selects nine major thematic areas encompassing the economy and elaborates upon them. The emphasis is on gleaning lessons and chartering the way forward. The opening Theme Chapter titled ‘The Economy & Policies: An Overview’ assesses the performance of the economy against the targets at the aggregate level and discusses the policy initiatives of the present government in the context of the overall objective of poverty alleviation. The Theme Chapter on ‘Macro Economic Factors’ offers the overall background and Plan financing, while the chapter on ‘Governance’ discusses a variety of measures aimed at improving the efficiency of the economy. Issues related to growth with inter-generational equity are addressed in the chapter devoted to the study of ‘Environmental Sustainability’. The development of human capital, which cuts across all sectors of the economy, is spread over two chapters: ‘Employment & Skill Development’ and ‘Human Resource Development’. The former chapter focuses on skill creation, vocational education and labour-market issues while the latter concentrates on education, health and woman and child development. The all-important issues of infrastructure including those relating to energy are taken up in the chapter entitled ‘Physical Infrastructure’. Two remaining chapters are devoted to overall ‘Agriculture and Rural Transformation’ and ‘Urban Transformation’. To revive growth and overcome structural constraints in the economy, key policy reforms have been undertaken by the Government, while many more like the Goods and Services Tax (GST) are in the pipeline. In the spirit of cooperative federalism, States and the Central Government have joined hands in taking the reform process forward in the important area of labour, which is in the Concurrent List of the Constitution. Rajasthan, Madhya Pradesh, Andhra Pradesh and Gujarat have introduced far-reaching reforms in this area that the central government has approved. These reforms and initiatives would give further push to the economy, which is already on a higher growth path, inspite of two consecutive droughts. The current financial year (2016-17) is the terminal year of the Twelfth Five-year Plan.When the present Government took charge, it was tentatively decided that the remaining period of the current Five Year Plan would serve as a transition period. At the time, it was felt that a call on the question of what ought to replace Five Year Plans may be taken later. This call has now been taken and NITI Aayog has been tasked with preparing the following documents: (i) A vision document keeping in view the social goals set and/or proposed for a period of 15years; (ii) A 7-year strategy document spanning 2017-18 to 2023-24 to convert the longer-term vision into implementable policy and action as a part of a “National Development Agenda”; and (iii) A 3-year Action document for 2017-18 to 2019-20 aligned to the predictability of financial resources during the 14th Finance Commission Award period. This is also to help translate into actions the goals of the government to be achieved by 2019. To carry out formulation of these documents NITI Aayog has initiated consultations with the Union Miniseries, State Governments and experts from all walks of life. The decision to discontinue Five Year Plans has also meant that the distinction between plan and non-plan expenditures conventionally made will no longer be made in the future Budgets beginning 2017-18. This is a suggestion that has long been made by economists. The principal distinction will now be between revenue and capital expenditures. A document such as this requires a massive effort and is the result of efforts of many. The bulk of the work on it was done when Smt. Sindhushree Khullar was the CEO, NITI Aayog. Her guidance and hard work were critical to the completion of the document. The document also benefited greatly from guidance and comments provided at various stages by NITI Aayog Members Shri Bibek Debroy, Dr. V.K Saraswat and Prof. Ramesh Chand. Shri Amitabh Kant, CEO, NITI Aayog, who joined the NITI Aayog as the CEO in January 2016, has been a constant source of encouragement and guidance to the team in the course of updating and finalizing the document. My sincere thanks are also due to our two very able Additional Secretaries, all the nodal advisers, group advisers and their teams for preparation of their theme chapters and their valuable support in completing the exercise. Special thanks go to Dr. P.K Anand, Senior Consultant, for coordinating the work on the document and Shri B.B. Sharma, Director and Shri R.B.Tyagi, Research Associate for assisting Dr. Anand from beginning to end. Finally, I wish to acknowledge the contribution of staff of all the Verticals/Divisions, NITI Aayog. (Arvind Panagariya) Contents List of Figures i - ii List of Tables iii - v List of Boxes vi - vii List of Acronyms viii - xxiii List of Annexures xxiv Chapters 1. The Economy & Policies: An Overview 1-13 2. Macroeconomic Factors 14-45 3. Employment and Skill Development 46-67 4. Governance 68-92 5. Human Resource Development 93-139 6. Physical Infrastructure 140-185 7. Environmental Sustainability 186-206 8. Agriculture and Rural Transformation 207-239 9. Urban Transformation 240-266 Figures 1.1 Shares of Manufacturing, Other Industry, Agriculture and Services in the GDP at Constant (Base 2004-05) Prices 4 1.2 Exports of Clothing and Accessories by China and India, 1997 to 2013 5 1.3 Employment in Apparel by Firm Size and Number of Workers- India v/s China 7 2.1 Composition of Household Sector Savings 23 2.2 India’s Trade Deficit and Current Account Deficit 30 5.1 Infant Mortality Rate 94 5.2 Maternal Mortality Rate 94 5.3 Total Fertility Rate 94 5.4 Major Education Indicators in Primary and Upper Primary Levels 109 5.5 Trend in Child Sex Ratio (0-6 years by Residence) (Rural Urban Disaggregation) 133 6.1 Targets/ Achievements for Capacity Addition in Five Year Plans (MW) 141 6.2 Gap between Average Cost of Supply (ACS) and Average Tariff, 2007-08 to 2012-13 144 6.3(a) Twelfth Plan Targets & Actual Production from Coal India Limited (CIL) (in MTS) 148 6.3(b) Targets & Achievements-Overall (in MTS) 148 6.4 Solar and Wind Power: Targets and Achievements 149 6.5 Crude Oil and Natural Gas: Twelfth Plan Targets and Achievements 154 6.6 Uncovered Villages (Mobile) 159 8.1 GDP and Agriculture Sector Growth 209 8.2 Expenditure Pattern of Ministry of Agriculture 210 8.3 Achievements Against Targets of Foodgrains Production During Twelfth Plan 212 8.4 Total Expenditure and Works Undertaken Under MGNREGA 226 8.5 Status of Rural Habitations Covered w.r.t. 40 Ipcd Drinking Water Supply 230 ii FIGURES 8.6 Number of Beneficiaries and Expenditure Under NSAP 233 9.1 Key Constituents of India’s Urban Future 242 9.2 Inter-State Variation in Progress of Reforms 246 9.3 Shortage of Urban Housing (2012) 250 iii Tables 1.1 Growth Rates of Gross Value Added (GVA) and GDP at Market Prices 2 (Constant 2011-12 Prices) 2.1 Growth Rates of GDP and GVA 16 2.2 Annual Growth Rate of GVA by Economic Activity at Constant (2011-12) Basic Prices 16 2.3 Sectoral Contribution to GVA at Current Prices 17 2.4 Growth Rates of State Domestic Product at 2004-05 Prices 19 2.5 Comparative Growth Rates in GSDP for Selected Low-Income States 20 2.6 Sectoral Growth Rates of State Domestic Product at 2004-05 Prices 21 2.7 The Saving and Investment Rates at Current Prices 22 2.8 Composition of Fixed Investment 22 2.9 Composition of Savings 23 2.10 Fiscal Position of Centre 25 2.11 Fiscal Position of the State Governments 25 2.12 Total Liabilities of the Central and State Governments 26 2.13 Wholesale Price Index, Annual Variation (Base 2004-05=100; per cent Change) 27 2.14 Consumer Price Index, Annual Variation (per cent Change) 28 2.15 Top Five Commodities Exported and Imported (April 2015-January 2016) 30 2.16 External Payments – Current and Capital Account 31 2.17 Twelfth Plan Projection and Realization of Resources of the Centre (per cent of GDP) 34 2.18 Twelfth Plan Projection and Realization of Resources of the Centre (Rs. crore at current prices) 35 2.19 Twelfth Plan Projection and Realization of Resources of the States (including Delhi & Puducherry) (per cent of GDP) 36 iv TABLES 2.20 Twelfth Plan Projection and Realization of Resources of the States (including Delhi & Puducherry) (Rs. crore at current prices) 37 2.21 Summary of the Grants-in-Aid to the States for 2015-20 38 2.22 Phasing of Budget/Expenditure 39 2.23 Summary of Budget and Expenditure of PFMS for the 12th Five Year Plan 39 2.24 Composition of Plan and Non-Plan Expenditure 41 3.1 Labour Market
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