THE RELEVANCE OF 5-YEAR PLANS - ROADMAPS WHICH TAKE YOU NOWHERE?
By Ruma Dubey
For us Indians, the five year plan is like a big joke. When someone does not complete the work and only makes plan, it is very common to hear people quip, “What, are you like India’s five-year plans? Only plan and no work!”
That unfortunately is the sad truth. We Indians, maybe it’s in our DNA, are excellent when it comes to chalking out plans but implementation, we score zero. The 12th Five Year Plan, 2012 to 2017 has already started in April and as 2013 also completing six months (it follows fiscal year ending), with one and half year over, one wonders what will be achieved in the next 3.5 years, especially when next year is an Election year? And time and again, one cannot help but wonder at the relevance of the five-year plans? Surely, it has to be just a roadmap where the Govt can go around and maybe sometime on the map, but never really looking at the goal post. That’s all – a rough guide for the economy to follow.
When the first draft of the plan, ‘Approach Paper’ was placed in front of the NDC in August 2011, the growth target was 9%, up from 8% in 11th Plan. This growth was planned at a time when the slowdown had already begun and world recession was deeply set. Later in Sept 2012, the growth rate was scaled down to 8.2% and later, Prime Minister, Dr.Manmohan Singh, who heads the NDC said that 8% is too ambitious a target given the current slowdown. He was right because the 11th Plan (2007-12), ended with a growth of 7.9% compared to the target of 9%. And this was at a time when India had one of the best growth stories, at least in the first 2 years of the Plan. Now the latest is that the Planning Commission is contemplating cutting the average GDP growth in the 12th Plan period to 6% during the mid-term review. As per the practice, the Commission comes out with a mid-term review of Plans during the third financial year of the policy period.
So what is the Govt actually doing by chalking out these plans – merely what it would like to see, something like dreams on paper? As many say, these five-year plans, which are never really followed, are mere intellectual speculations at the cost of tax-payers money. Moving goal posts seldom get you to the relevant objective.
One wonders, why is the Govt using this five-year roadmap? Well this practice of five-year plan is inspired by the erstwhile Soviet Union. Under Stalin, the country first put in place its Five-Year Plans for the National Economy of the Soviet Union. Jawaharlal Nehru was a huge fan of this plan of USSR and that’s how this five-year plan for modernizing and industrializing India was formulated. The first Five-year plan, from 1951 to 1956 was formulated by Nehru. But once the Soviet Union dissolved, their five-year plan was abandoned. If it makes us happy, China also followed Soviet Union’s and it too continues to follow the five-year road map and its current five-year plan runs from 2011 to 2015.
Well, China may follow its plans but truly for India, it is all a wasted exercise. Budgets planned in the five-year plan are never followed and neither are the other rhetoric’s. Just as a lot of things in our country need a complete overhauling, the way these five-year plans are formulated, their priorities, all need to change. Today, these Plans are merely words on paper and so much time and money is being wasted on something which we all know will never be followed.
Five-year plans need to be more about key sector reforms. It needs to give a framework on land acquisition and yes, environment should become a priority too. Why can’t the NDC have independent regulators fixing electricity costs? GST needs to become a reality. Mining issues need to be resolved and infra bottlenecks ought to be removed urgently. So how does it help if the NDC merely talks in the air, with no feet on the ground? It is totally ineffective and maybe the Govt first needs to tighten the age-old way in which NDC works and formulates Plans.
Plans need to be realistic and sometimes, if achieved, will bring in some faith. Today, these five-year plans have become mere jokes!
OBJECTIVES OF 12TH FIVE YEAR PLAN WHEN IT STARTED OUT:
- Growth of 8.2%
- Agriculture growth of 4%
- Manufacturing growth of 10%
- Total plan size at Rs.47.7 lakh crore, 135% higher than investments realised in the 11th Plan (2007-12).
- Bring down poverty ratio by 10%, which currently is around 30% of population.
- Doubling of infrastructure investments to $ 1 trillion