Prime Minister Manmohan Singh on Thursday asked the Planning Commission to prepare an approach paper for the 12th plan period in consultation with the state governments aimed at more focus on health, education, rural development, power and water shed management.
There will be higher allocation of funds for these sectors and less for others as gross budgetary support will rise by only 1.3 % in the next five years even as PM asked higher investment from the private sector to bridge the resource gap.
Plan panel deputy chairperson Montek Singh Ahluwalia said: “We have not decided the sectors where the resources will be less but we are firm that key social sectors such as health and education will get more”.
The commission said expenditure on health would increase from present 1.3 % of the GDP to at least 2 % and perhaps 2.5 % of the GDP by end of 12th plan. For power sector, the panel aims to generate one lakh megawatt of power but cited availability of coal and environmental hurdles as major constraints.
In education, which did not get enough funds in the 11th plan, the panel believes it can achieve the Gross Enrolment Ratio (GER) of 30 %, five percentage points higher than the target. Universalisation of secondary education by 2017 is another target set for 12th plan.
Singh, who chaired the full plan panel meeting, said the new economy growth target of 9 to 9.5 % for the 12th plan should be aimed keeping in view sustainability and low carbon issues in mind. In the 11th plan, India is set to achieve the economic growth of 8.2 %.
Targeting 9 to 9.5 % growth rate will mean an average inflation of 5 % and fiscal deficit to be reduced to 3 % by 2014-15. “Proper fiscal balance with good agriculture growth can help in keeping inflation under check,” Ahluwalia said.
The panel had earlier told the PM that even achieving 9 % growth will need strong policy action and at least 4 % growth in agriculture. Plan commission member Abhijit Sen said the target can be achieved with 3 % agriculture growth in the 11th plan despite a bad drought year.
The panel also said the UPA's flagship Mahatma Gandhi National Rural Employment Guarantee Scheme should be redesigned to increase contribution to land productivity.
PM said the objective of the next plan should be faster, more inclusive and also sustainable growth. "For this we need to define new targets...We need to identify the critical areas where existing policies and programmes are not delivering results, and should, therefore, be strengthened or even restructured", he said.