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India’s 12th Five Year Plan to Focus on ‘Inclusive Growth’

By Teja Yenamandra

Apr. 25 – As India’s government prepares to submit its approach paper for its 12th five-year plan (a plan which covers years 2012 to 2017), the Planning Commission’s focus on instilling “inclusive growth” is making headway. The plan is expected to be one that encourages the development of India’s agriculture, education, health and social welfare through government spending. It is also expected to create employment through developing India’s manufacturing sector and move the nation higher up the value chain. Prime Minister Manmohan Singh, however, warned that maintaining fiscal discipline is important as well.

The commission will likely strive to enact policies that will achieve somewhere around a 10 percent growth rate in factories and a 4 percent growth rate in farm produce, though Prime Minister Singh has asked the plan to set the nation’s growth rate firmly at 9 percent to 9.5 percent.

Come May, a view into the implementation of these goals should be apparent. A question that India’s government will have to grapple with, much like that of any emerging market, is whether to continue to focus on GDP growth in the face of soaring food prices and economy-wide inflation.

An important aspect of generating “inclusive growth” is shifting the target of government aid to rural areas. Typically, large projects such as power generation, roads whereby freight can travel, and airports receive the lion’s share of government subsidies, while rural infrastructure receives comparatively little.

A recent op-ed piece in the Wall Street Journal by Saurabh Tripathi, a partner with Boston Consulting Group, echoed these sentiments.

“Rural infrastructure, which serves 70 percent of the population, doesn’t get the attention it deserves. As the Planning Commission sets out to draft the country’s planned investments for the next five years, it is important to take note of this gap, and the innovative solutions needed to fill it,” Tripathi wrote.

As indicated from the planning commission’s presentation to the prime minister on April 21, the quantitative metrics known thus far in the early stage of the five-year plan are:

  • A target of GDP growth in the 9 percent to 9.5 percent range
  • An increase in literacy rates to 100 percent between the plan’s period from 2012 to 2017
  • An increased expenditure on health from 1.3 percent to 2.0 percent of GDP

In a boon for industry, the planning commission indicated that it aims to have industry and manufacturing-related activities grow by 11 percent over the next five years, contrasted to 8 percent over the previous 11th five-year plan. It also aims to undertake somewhat vaguely defined, but certainly well-intentioned, structural and regulatory reforms to facilitate investment.

The presentation highlighted the planning commission’s views that commercial energy demand is expected to increase by 7 percent per year over the next five years.

To address that increase in demand, the planning commission recommended that all methods of current energy production and distribution be developed, from coal to nuclear energy to solar and wind, and proposed that existing taxes on electricity should not be raised.

Interestingly, the Planning Commission envisioned an expansive role for Indian SOE Coal India:

“Coal India must become a coal supplier and not just a mining company. Should plan to import coal to meet coal demands. This requires blending of imported and domestic coal as supplied by Coal India.”

All told, in its early stages, the 12th five-year plan promises a lot for rural development and growth. In that sense, it is similar to China’s latest iteration of its five-year plan, which seeks to improve the lot of rural Chinese peoples by increasing urbanization and industrial efforts in central and western China. But, by contrast, while the Chinese government seems to be continuing with nation-wide industrialization efforts, the Indian government may be attempting to promote a policy of reverse migration by making rural living more attractive with some access to modern amenities, but hopefully without the accompanying chaos that goes with it.

The planning committee’s PowerPoint, as well as Prime Minister Singh’s opening and closing remarks, can be found here.

Dezan Shira & Associates can assist with corporate establishment, legal, tax and due diligence issues in India. The firm maintains offices in Delhi, Mumbai, Bangalore, Chennai and Kolkata. Please email at india@dezshira.com or visit www.dezshira.com for details.

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49 Responses to India’s 12th Five Year Plan to Focus on ‘Inclusive Growth’

  1. surya nath says:

    how will this inclusive growth model address the contradiction the Indian Farmers sells his potato at the price of Rs. 2.50 per Kg, while uncle chips is sold at the rate of Rs.20 for per 80gm or wheat at the rate of Rs. 12/Kg and Shakti Bhog atta(floar)at the rate of Rs. 25/Kg. what is the logic?

  2. VIJAYASARAVANAN says:

    Sir,it is appreciable about the focus in inclusive growth.As you know well health is wealth,people need a strong mind and haelthy body frre from diseases.Why can’t government utilise BHMS,BUMS,BAMS,BNYMS DOCTORS for fullfledged preventive medicicine awareness in healthcare delivery system.kindly organise all state governments to do so.

  3. kamlesh Meena says:

    Sir, Ok Inclusive growth in our mission during the 12th five years paln but this is we have accept that Our groth in Science & technology is still very slow to comparison to other develping countries , and expenditure on Science & Technology also not very enoguh for achieve our Democractic goals for common people

  4. kunal khinchi says:

    its fine that there will be inclusive growth in next five-year plan and aim is to touch 9-9.5% growth rate..if it achieved its vry fine bt if it will not then what steps govt. will take ..is there any proper check or committee over this because corruption is also going parallely..

  5. sushil says:

    sir
    india is no doubt a rich country
    black money is many fold than white money
    it is required to make policy to stop circulation of black money
    and i think there are crores of shopkeepers in india who sells items without billing and purchase without billing. it is required to be stop. sales tax revenue of state will increase many fold and growth of states will automatically lead to country growth.

  6. girja nandni jain says:

    its really good that the 12th five year plan is focussing on inclusive growth but does indian government knows the meaning of this practically also? as,the mention of inclusive growth is done earlier also in many schemes ,plans ,committes…but no visible implication is ever seen anywhere or we may say the outcomes are not there

  7. palak khan says:

    daydreaming is good for indian govt. but they should keep in mind that overnight wonders are not possible!!!!!!!!!!!!!!!how can we achieve our goals when proper implementation is not there………..what i feel is that 12th five year plan should be proper implementation of rules

  8. nandini says:

    i think that in 12th five years plan ,first of all you must encourage the farmers by providing them a handsome amount of money and other facilities such as proper housing and some advantage.else they will get frustrated and shift to urban areas for more good jobs and more money and also for better education for their children which will result in low food ,higher prices and more population in urban areas.let them feel greedy then only the world can move .

  9. suresh ozarde says:

    It is fine but let us CHANGE FOR A BETTER .

    GOVT TO FOCUS ON EDUCATION,HEALTH AND DEFENCE —MAINLY

    OTHER AREAS TO BE PRIVATISED SUCH AS RAILWAY,ROAS,BRIDGES,PORTS,TERMINALS ,TOURISAMS ,SPACE RESEARCH ETC.

  10. ajay kumar says:

    sir, lets hope something is better than nothing.every planning needs a honest action and proper observation.

  11. Thomas says:

    “INCLUSIVE GROWTH” Nothing more than another feel good, fancy, heart warming campaign slogan just like the India everywhere, India superpower, and off course the infamous ” SHINING INDIA” slogans! LOL Indians leadership couldn’t organize a 3rd rate sports competition, the CWG’s and yet now wants to lift the entire population out of poverty? Just like the bridge for the CWG, it’s gonna collapse!

  12. pramod pandey says:

    It is good for indian citizen ,but how can possible to achive goal with inclusive growth rate.we must looks education poverty corruption black mony reral areas and deprived class ,then relly happen india shining.

  13. syed faridul says:

    Late the black money be brought back which is 90,000 crore in indian currency & see how much rich is our country. whatever we can do many schools,hospitals,colleges & projects for the poorer.

  14. eknath salve says:

    first of all we must understand that we must follow our constitutional duties politely and strictly. we must not opt wait and watch policy. everybody needs to contribute for healthy and wealthy india.

  15. Arun Kumar says:

    During the 12th five year plan, the government should plan to achieve 4% growth in Agriculture which we are not able to achieve from the earlier plans,beginning from the very first five year plan(1951-56).This not only decrease the demographic divide between rich & poor but also helps in eradicating poverty(the slogan reffered in 1971 by Indira gandhi).Agriculture even today gives the largest no. of employement to indian population(it contributes approx. 18% in GDP whereas the gives max. no of employment).If we able to achieve 4% growth it helps in eradication the Rich-Poor divide.Also no need to underevaluate the BPL(Below Povery line) as framed by Planning commission,this will automatically be changed.The Government instead of focus on Classes shoul focus on Masses which helps to provide E3(Efficiency,Equity & Effectiveness) for majority of population.

  16. Manoj Kumar Tiwari says:

    this is true that the way of inclusive growth is one of the best stretegy for developing the country …..but always keep in mind the only policies on paper is not able to acheive the goal…..there is a need to activity on the policies……but our government would not able to do this in proper way……………….policy for 12th plan is good no dougt but achive the goal is the real challange bofore us….

  17. JOSY JOSE says:

    i agreed this concept of inclusive growth.but many people of India are suffering from various disease because of waste.WASTE IS THE IMPORTANT CURRENT PROBLEM IN INDIA.So give first priority in waste management.It will make our India be healthy and clean.

  18. Akshay Jangra says:

    Inclusive growth according to me means growth in all aspects..we are focusing more on GDP as a measure of growth but actually we need focus on people. PDS, Health care, Education and minority needs to be included in growth.Disparity should not exist among society.Comparing the growth of India except unprecedented growth in GDP, we have been very slow in terms of life expectancy, literacy etc. I believe all these are taken care of while implementing policies. India will shine when BHARAT shines.

  19. Dr.K.Ramalingam says:

    Inclusive growth is must. Agriculture sector should be organized like a production unit under public private partnership in cooperative farming. Agriculture University should have a separate set up to do this:\
    Suggestions:
    1. Fertile lands to an extent of 1000 acres should be compulsorily brought in for advanced organic farming.
    2. land owners can be paid as yearly lease for a period but farming will be with machines and advanced technology used by farming Scientists
    3. Farm laborers are trained as skilled workers and paid salary as an contract employee
    4. Rural women folk will be trained on farming and engaged as farm labourers during cultivation on short labour contracts
    5. Incentives to be given to land owners to participate in the Mass and modern farming by agricultural experts and participation by private
    6. This arrangement should be treated as an industry and all infrastructural facilities are established
    7. The farm workers are trained and used for farming and replaced by their kins every one year

    The scheme will increase/generate agricultural production. Farm labourers are trained in advanced skills and allowed to continue farming in their own land. Private land owners will focus on farming instead of turning to real estate business. Lot of land has been plotted and sold without housing or farming. A good thought can be worked out in these lines.

    Dr.K.Ramalingam

  20. Mrs. jayanthi sebastine says:

    all the inclusive growth is good and needed but is it possible to apply as such. the government has to make local bodies to carryout the plan directly. Let us hope for the best

  21. KAMBLE MOHIT BALASAHEB says:

    INCLUSIVE GROWTH WITHOUT SOCIAL INDICATORS IMPROVEMENT, AND POVERTY REDUCTION ITS IMPOSSIBLE. WE CAN ACHIEVE BUT WE HAVE TO PLAN GOOD GOVERNANCE WITH PROPER IMPLICATIONS OF INCLUSIVE GROWTH FACTOR WITHOUT ANY EXCLUSION.

  22. KASTHURI says:

    I agree that concept but many indian peoples are afected by the poverty so please concentrate on to remove the povety

  23. madhav sharan pathak says:

    on today i would like to say that their is a necessity to think as a patriotof country now we will have to think about country and try to best ourself if we want erase poverty castism unemploynent populationgrowth than we will have to honest in our profession try to help each person in our official place and pls not take bribe because on that place you are not taking brive you are stealing the chapati of needy person if we will work honestly and with our duty then the day is not very far when our country willl be top rank no coutry will able or equal of our india so its a humble request from the every citizen of the country please be the honest citizen of india

  24. sunil rathod says:

    the concept of inclusive growth is good for in 12th five year plan in this plan rural development is important my kindly request to educate more rural people and help agriculture so our economic growth increases. let us best for the hope

  25. G.Krishnamachari says:

    1The govt planning for the budget allotment alone is not sufficient.They should also plan the foolproof system that the money being spent in the proper plce,goesto the proer people & in proper time.
    2.They should plan to bring in co-operative system of plantation by which the farming becomes organised sector.Once it becomes organised sector proper wages will go themThey also can be covered under various schemes like Health,safty &environment
    3.The salary of medical staff &teachers should be so attractive so that they will not hesitate to serve there.
    In short,migration of villagers to already overcrowded cities shall be stopped.

  26. vetz says:

    India with a very heritage it will add economic growth if more attention is given to tourism development .we can take the example of singapore.

  27. Thomas says:

    INCLUSIVE GROWTH!…Does this mean that the India government is gonna open up Swiss Bank accounts for all Indian citizens?

  28. Abhishek says:

    sir,
    In my opinion its very simple. Give Indians :

    1. LAW & ORDER
    2. Infrastructure
    3. Health & Education
    4. Trust your people and let them work.

    Indians like any other people are smart enough to want to be rich and can be rich. Just facilitate and empower them and they will do it on their own.

    There is no greater empowerment than money. I believe too much focus and needless waste of time and resources in artificial social empowerment will not solve much. Money is the greatest social lubricant. Let our people be rich and they will solve most problems themselves.

  29. ZOZO says:

    Whatever the policy may be, all we need is PROPER IMPLEMENTATION. we actually do not need magic min blowing policy or schemes. If we implement even the existing policy well. We already solve half of our problems

  30. MAMATA SAHOO says:

    Inclusive growth means not only every sector development but we have to make aware each and every Indian that whats is going on here.
    There are so many people they do not about it what 12th year plan or Inclusive growth. There are many people in India they are illiterate plz we need development in our education system then we can remove almost all the problem. Just awake the people what is going on in Govt. Then surely we achieve our goal.

  31. Ankash says:

    Just tune up IT with better Broadband speed, Tabs that are 10” inch above with affordable BB plans in the hands of every Indian. You will see India transformed in a decade or two.. Knowledge = Money=Power in the hands of people. Make every Indian to trade shares or invest in long term equities and do farming. You will get India superpower in a decade.

  32. Ankash says:

    Stop voting for the politicians who are preaching divide in the name of Religion, Caste, Cow and Curry. Leave the Rascals alone.

  33. Dr S K Sharma says:

    So far good that the XII Five Year Plan 2012-17 is going to highly inclusive and participative. My special concern is regarding the reservation in jobs and educational institutions. Even after 64 years of independence we continue to provide reservation on the basis of castes the five thousand year old concept. In modern era this is against the concept of equality as given in our constitution. It is again against the article of equality of opportunity. By providing reservation we are helping a very small section of people in SC/ST whereas others are being deprived of jobs. Only five castes have cornered 99 per cent of benefits whereas there are more than 1000 SC/STs in India. We are adding to the elite SC/STS without any social objectives. Now, we can have a scientific system of economic criteria in identifying the poor sections of society. The present census data very well supports this. It would be better if the caste system be removed from India permanently by introducing casteless society in the preamble of our constitution . DR Sharma

  34. subhrajit says:

    @ suryanath

    the potato chips that they give in the packet of uncle chips is they are maintaining a courtesy they are mainly selling the nitrogen gas trapped inside to us and we foolishly for enjoyment buy that

    subhrajit

  35. chetan mishra says:

    firstly, government should impliment all his plan in right way.

  36. Great comment concerning the caste system – and thanks for the debate guys. – Chris

  37. Jaya naga siva prasad .Tangellamudi says:

    At the outset i would like to say congratulations for the concept “Inclusive Growth”, i think that the government should come forward to explain the importance of each sector..i agree with all the comments above.
    Development never comes unless and until we think about it, so we should self introspect ourselves, the awareness should come from with in then only we can solve any problem wat ever it may be.

    In this undefined world The poor is walking miles and miles to earn food and the rich is walking miles and miles to digest food.. if everybody follows the concept of “Sustainable Development” we can make our world better…

    just keep in mind “PAPER MONEY NEVER MAKES RESOURCES ALWAYS”
    “NEVER BLAME THE GOVERNMENT AND POLICIES,WE HAVE MAKE THEM TO OUR FAVOUR”

    “THANKS FOR GIVING THIS OPPORTUNITY”

  38. Jaya Naga Siva Prasad Tangellamudi – your comments are both humanitarian and appreciated. Thanks – Chris

  39. vaishmathi says:

    INCLUSIVE GROWTH??? What does it mean… ? “Inclusive growth” plan includes growth of corruption, black money and bribery all the way? should all this be planned through five year plan and planning commission?? oh.. yes.. corrupting huge funds needs a long term plan.. LOL… EXAMPLES OF ACHIEVEMENTS OF THE LAST FIVE YEAR PLAN: 1. CWG 2. 2GSpectrum corruption(am confused how many zeros does this money hav!) 3. IPL scam 4. fodder scam 5. karnataka housing board scam. do u think these people will feed us better than shit if it goes dis way???

  40. @Vaishmathi – a bit harsh there. But if you want to change it – get involved. India needs younger people getting into politics. – Chris

  41. k raju a teacher says:

    i wish india to be the developed country today itself. but even after 10000 years india will be one of the 3rd world only, for the people in india should come out of the shell. everyone should work for the prosperity of the nation not for his/her own prosperity by making the nation scapegoat. bribery should go out of india only then india may come out. misusing of power is an other enemy resisting india from its growth.
    dont provide ration,educational scholership, government provisions like electricity water to the overpopulated family, or atleast to the over populated members of the family. let them bear the burden and feel the importance of population control and thus the growth of the nation.
    provide lakhs and crores of rupees to the so called suppressed people to make them to score marks that is scored by others, and dont bring the level of the nation down by providing options to the low scorers.
    classify the people by economic condition, and not by the traditional meaningless way.

  42. @K.Raju – India has to match it’s population dividend with policies to policies that ensure it takes advantage of this. Doing so fits in with an economic theory named the “Lewisian Turning Point” and I have written about how that impacted upon China – and could upon India, here: http://www.china-briefing.com/news/2012/03/27/why-chinas-consumer-development-is-assured.html
    India’s politicians need to come closer together in terms of delivering longer term sustainable policies instead of bickering about smaller regional issues if they are to accomplish the same. Thanks – Chris

  43. shilpa koley says:

    none of the plans yet had worked effectively

  44. parichay says:

    how will this inclusive growth model address the contradiction the Indian Farmers sells his potato at the price of Rs. 2.50 per Kg, while uncle chips is sold at the rate of Rs.20 for per 80gm or wheat at the rate of Rs. 12/Kg and Shakti Bhog atta(floar)at the rate of Rs. 25/Kg. what is the logic?

  45. Dheeraj sai says:

    these are going on properly but what about corruption in india

  46. asif bagwan says:

    accordance of our india its good because you have focused on rural area. first govrernment strictly follow all rule.

  47. pallavi sinha says:

    there is so much corruption in India that we can’t think that any plan will work accordingly,for the overall development,the word like corruption must totally be abolished.

  48. suraj says:

    if its works its good

  49. Toton singha mahapatra says:

    If u reaaly need no how it become possible that growth i think u know better than me.
    But i would like to focus in few areas of agriculture development. The development is possible by increasing poructivity by increasing the cropping pattern in areas where average rainfall is good but mono cropping is practices due to water crisis in winter and summer season.In west bengal district like Bankura,purulia,birbhum is received the highest rainfall but due to low water harvesting most of its productive land are vacant after rainy season. Same in Maharastra,karnatak,orrisa north,jharkhand.

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