India 2018

458 India 2018
these have been the objectives in earlier Plans, in the current Plan there are
specific monitorable targets, which will need to be attained along with the growth
target.
The Incremental Capital Output Ratio (ICOR) of the economy was expected
to come down to about 3.6 as against 4.5 during the Ninth Plan. This decline in
ICOR was achieved mainly through better utilization of existing capacities and
suitable sectorial allocation of capital and its efficient utilization. The growth
target, therefore, would require an investment rate of 28.4 per cent of GDP. This
requirement was to be met from domestic savings of 26.8 per cent of GDP and
external savings of 1.6 per cent. The bulk of the additional domestic savings will
have to come from reduction in Government dis-saving from -4.5 (2001-02) to
-0.5 per cent (2006-07) of GDP. The average growth rate in the last four years of
the 10th Plan (2003-04 to 2006-07) was little over 8 per cent, making the growth
rate 7.7 per cent for the entire 10th Plan period. Though this was below the target
of 8 per cent, it is the highest growth rate achieved in any Plan period.
Eleventh Plan
The Eleventh Five Year Plan (2007-12) provided a comprehensive strategy for
inclusive development, building on the growing strength of the economy, while
also addressing weaknesses that have surfaced. It set a target for 9 per cent
growth in the five year period with acceleration during the period to reach 10 per
cent by the end of the Plan.
Twelfth Plan
The Twelfth Plan fully recognizes that the objective of development is broadbased
improvement in the economic and social conditions of our people. However,
rapid growth of GDP is an essential requirement for achieving this objective. The
Approach Paper to the Twelfth Plan, had set a target of 9 per cent average growth
of GDP over the Plan period (2012 to 2017). That was before the Euro-zone 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. Twelfth
Plan envisaged that the current slowdown in GDP growth can be reversed
through strong corrective action, including especially an expansion in investment
with a corresponding increase in savings to keep inflationary pressures 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 the Plan period.
Policy Making and Programme
Closure of Sick Central Public Sector Enterprises
The Aayog launched a two-layer process whereby a committee headed by the
CEO undertook a detailed analysis of the sick CPSEs with the assistance of the
National Institute for Public Finance and Policy. This committee reported its
findings to a committee headed by the Vice Chairman. A report was prepared
with the recommendations and sent to the PMO. A decision was then made by
the Cabinet to close several sick CPSEs.