10th Plan closes in on achieving targets

10TH PLAN TARGETS PART-I

The 10th Five-Year Plan, which ended on 31 March, has come close to achieving the growth targets set at the outset of the Plan by the Planning Commission.

The Plan has ended with an average gross domestic product growth rate of 7.8 per cent, as against 8 per cent estimated for the entire plan period (2002-07). Though the GDP growth is below the 10th Plan target, it is the highest growth rate achieved ever in any Plan period.

However, the performance of various sectors including agriculture, health and education have failed to meet the Plan targets. "If we take out the performance of agriculture in the last five years, other sectors like industry and services were on target," Pronab Sen, Principal Adviser to the Planning Commission, told Business Standard.

He added the average growth for the agriculture sector during the 10th Plan period was estimated at 3.4 per cent, which was below the desired level of 4 per cent for the period.

Another reason to be optimistic is that industry and the services sectors have performed well compared to the Ninth Plan. Industry grew at nearly 8.74 per cent and services grew by around 9.3 per cent in the 10th Plan, as compared to 4.6 per cent and 8.1 per cent, respectively, in the previous Plan. The two sectors were expected to grow at 8.9 per cent and 9.4 per cent annually, respectively.

The investment rate has also improved to 28.1 per cent of GDP, which is close to the 28.41 per cent target set for the Plan. Investments have gone up by 5.1 per cent from the 9th Plan period.

"The reason for the investment rates going up is due to the fiscal correction mainly in the states. The performance of the states is much better than we expected," Sen added. The turnaround after the industrial recession in the Ninth Plan was also another factor for the investment rate going up, he said.

A pleasant surprise was the domestic savings rate, which was not estimated to have performed as well as it actually did. The savings rate rose to 26.62 per cent in the 10th Plan period, as compared to 23.1 in the Nineth Plan.

Sen said the rise in the savings was driven mainly due to higher public investments. Significant changes also occurred in the financial sector as the interest rates came down. Due to this, the private sector investment had gone up in the infrastructure sector, he said.

Inflation remained near the 5 per cent set for the 10th Plan. The average inflation during the five-year period stood at 5.02 per cent.