After 50 years and nine Five-year Plans, the government is revamping its planning process to reflect the changing economic reality.
The Tenth Five-year Plan (2002-03 to 2007-08) document will be presented in four volumes instead of the usual two. Not only this, the Plan will also focus on strategies to improve growth and the policy challenges facing the government, rather than the old format of technically determining the capital required to achieve a desired growth rate.
In keeping with the new format of the Plan, the Planning Commission, which puts the plans together is also looking at outsourcing some sections of the Plan, ostensibly, to bring in a fresh approach and new thinking to the planning process.
"As the economy has liberalised, development and growth will come more from the private sector and less from the public sector. So, instead of focussing on capital-output ratios for public sector investments, the focus should be on policy imperatives to fuel further growth in the private sector," say officials.
Also, once the Plan document is endorsed by the Cabinet and the National Development Council (NDC), which consists of the state Chief Ministers, there will be greater consensus and agreement on policy reforms to be pursued in the coming five years. "States cannot disagree on the policy prescriptions, to which they have been party to in the Plan document," they add. This could be very crucial for the second generation reforms, which depend on the states to a large extent.
The policy prescription for the government will constitute Volume I of the Plan document, which will include chapters on industry, power, agriculture, fiscal situation, foreign investment, balance of payments etc. Volume II this time will be the usual Volume I of the Plan document.
However, this time, it will also include a chapter on governance. Volume III will be what was Volume II of previous Plans and will be written by various divisions in the plan body using inputs provided by steering committee reports.
Another new feature this time is Volume IV, which will focus on the states. While the objective of economic growth has remained unchanged in 50 years of independence -- the benefits of government policies have not been evenly distributed. Regional inequality has increased sharply over the last 50 years, with states like Maharashtra and Gujarat growing at close to 9 per cent, while at the opposite end of the spectrum, Bihar has an annual growth rate of only 1.5 per cent.
The Tenth Plan will have to account for the fact that private investment is not likely to automatically flow to the backward states and also for the declining importance of public investment, say officials.
Therefore, one section of the plan will focus on poorly performing states like Bihar, Orissa and those in the North-East and on what needs to be done to reduce regional inequality. The objective is to ensure that national targets are derived as an aggregation of state wise targets, they add.
