Draft of 11th Plan paper this month

First draft of approach paper to elaborate on alternative models for achieving 8% growth.

The Planning Commission has started working on the Eleventh Five-Year Plan (2007-08 to 2011-12). The first draft of the approach paper is expected to be ready in August.

The draft, which will elaborate on alternative models to achieve the targeted 8 per cent growth, will be prepared by Planning Commission Member Kirit Parikh.

Parikh had been asked to consult experts, both inside the commission and outside, to come up with the first draft, officials said today.

The Eleventh Plan will, among other things, include a long-term reform agenda that was identified in the mid-term appraisal (MTA) of the Tenth Five-Year Plan.

A number of items, including doing away with tripartite agreements in the power sector, had been dropped from the MTA before it was sent to the National Development Council for approval. The intention was to take up contentious issues at a later stage.

"There were a number of policy directions in the MTA. Operationalising them is the priority for now. For that, we will have to interact with state governments," said Planning Commission Deputy Chairman Montek Singh Ahluwalia. He added that it was still too early to talk about what would go into the next Plan.

Another issue, expected to crop up in the Eleventh Plan, relates to savings and investments. The Planning Commission, based on the model it uses, feels that the official figures have over-estimated the savings and investment rates.

The official figures, arrived at by the Central Statistical Organisation (CSO), had put the savings rate at 28.1 per cent, and the investment rate at 26.3 per cent.

On this, the Planning Commission had said savings should be around 24 per cent and the investment rate, a little over 23 per cent.

The finance ministry admitted that not only there were sharp variations in these rates from year to year, there was a significant component of errors as well. It also said the rates had been arrived at jointly by the CSO and the Reserve Bank of India, and were the accepted official figures.

"This issue will be of relevance to assess whether the country can achieve the targeted growth rates in the Eleventh Plan period, and ,therefore ,will be taken up when the discussions on the Eleventh Plan start," an official said.