(Online Course) Madhya Pradesh PSC: General Studies: Eleventh Five Year Plan

Online Course for Madhya Pradesh Public Service Commission

General Studies: Eleventh Five Year Plan

Approach and Salient features of the
Eleventh Five Year Plan 2007-12

Over the last fifty-six years, planning for economic and social development has been an integral exercise. The transition from a traditional and subsistence economy of the fifties to a modern, industrial and knowledge economy has largely been the outcome of plan exercises spanning a total of ten five-year plans and a few annual plans. Planning is far more than a mere allocation of resources among competing uses. Planning prescribes a direction towards which the economy is sought to be moved with a view to attaining pre-determined goals and objectives. And given the federal character of our polity, it is the combined effort of both Union and State governments towards achieving plan objectives that is given shape in the exercise of five-year plans.

One of the most critical part of the planning exercise relates to financing the plan. The economic scenario at the beginning of the Eleventh Plan is certainly better than it was in earlier plans. The state of public finance has improved significantly during the 10th Plan period. As against the approved outlay of Rs. 25,737.25 crores for the Tenth Plan, the revised outlay is of Rs. 33,724.96 crores. The improvement has come about from higher tax revenue mobilization, both at the Centre as well as in the State, and containment of non-plan expenditure through strict economy measures.

The state has enacted the Fiscal Responsibility and Budgetary Management (FRBM) Act, 2005. The Act requires the Government to fix rolling targets for fiscal indicators including fiscal and revenue deficits. The proposed plan outlay for eleventh plan has been determined keeping in view the rolling targets for fiscal deficit to be achieved. Share of Central taxes has been assumed to grow @ 10 per cent and the State's own tax revenues have been assumed to grow @ 13.5 percent during the Plan period. The normal central assistance has been estimated to grow @ TO percent. The state' non-tax revenue is projected to grow @ of 5 percent. A major proportion of the non-tax revenues come from mining and forest and are dependent on policies of Government of India. Coal royalty, which is the main source of mining revenue continues to be fixed on tonnage basis and is not revised regularly by Government of India. Exploitation of forestry resources is also severely constrained due to national policies.

The total size of the Eleventh Plan is Rs. 69,788.00 crores at current prices as against the Tenth Plan approved outlay of Rs. 33,724.96 crores. The size of the Eleventh Plan is 2.07 times compared to Tenth Plan while the Annual Plan 2007-08 is 1.33 times that of the approved outlay of the Annual Plan 2006-07.

Keeping in view, the historical growth rate and potential of economy, we are targeting an average growth rate of 7.6 percent for the State of Madhya Pradesh. This is lower than the national target of nine percent. However, the state economy has been growing at an average growth rate of 4.83 percent during the period 2002-03 to 2005-06 and therefore, to achieve the target will require a substantial improvement of nearly 2.8 percentage points over the previous plan period. We anticipate the primary sector constituting roughly 32 percent of the NSDP (at constant price) to grow at 5 percent per annum, the secondary sector constituting about 26 percent of the NSDP to grow at 10 percent per annum and the tertiary sector constituting roughly 42 percent of the NSDP to grow at 8 percent per annum.

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Objectives: The Eleventh Five Year Plan aims to achieve improved quality of life for the citizens of the state and contribute to the larger national goals of socio-economic development. This will require faster and more equitable social and economic development of the state. Accordingly, the objectives for the Eleventh Five Year Plan are spelt out as under:

  • To achieve an overall growth rate of 7.6 percent. This is envisaged to be achieved through 5 percent growth in agriculture and allied sectors, 10 percent growth in industry and 8 percent growth in service sector.

  • To reduce poverty levels from 38 percent to 25 percent

  • To achieve the literacy rate of 84 percent by the end of the Plan and reduce gender gap in literacy to 14 percent.

  • To achieve reduction in drop out rate from 46.8 percent in 2003-04 to 20 percent by 2011-12 and eliminate gender disparity in elementary education.

  • To bring down population growth rate to 1.62 percent by 2012.

  • To improve health parameters-reduce Maternal Mortality Ratio (MMR) to 125, IMR to 40 and TFR to 2.4 so as to bring them near the all India level.

  • To improve the sex ratio (0-6 years) to 950 females per 1000 males.

  • To reduce malnutrition to 30 percent and anemia to 30 percent.

  • To provide sustainable access to safe potable drinking water to all independent habitations.

  • To empower women through their socio-economic development and increased participation in decision making on matters that directly affect them.

  • To strengthen social, economic and political empowerment of weaker sections of the society through welfare of SCs/STs, OBCs, minorities and poor.

  • To expand present irrigation facilities at least by 10.61 lakh hectares through conservation, efficient utilization and development of water resources.

  • To develop strong infrastructure of power to provide adequate and improved quality of power to all the villages and meet the peak demand.

  • To provide a minimum single connectivity by all weather BT roads to all villages with population over 1000 in general and 500 in tribal areas.

  • TO encourage use of information and communication technologies to bridge digital divide, generate employment, have e-governance and prepare the state to be a knowledge economy.

The order of above objectives does not reflect the order of priorities. All the objectives are important, internally consistent and mutually reinforcing.
Sectoral distribution of Plan Outlay: The detailed sectoral outlays have been decided keeping the above mentioned objectives in mind and are given in the Annexure.
The outlays reflect the public investment in different sectors out of the state plan. However, they do not communicate the correct and complete picture of the total public investments in different sectors e.g. the central support through Centrally Sponsored Schemes (CSS) like National Rural Employment Guarantee Scheme (NREGS) etc. in Rural Development Sector adds up to about Rs.22,025.70 crores, which is more than double the size of state plan in Rural Development. Same holds true for Serva Sikhsa Asbhiyan (SSA). Similarly, support under National Rural Health Mission (NRHM) is also not reflected in the social services plan size.
The outlays do not communicate the correct picture of sectoral distribution either e.g. a very significant proportion of National Rural Employment Guarantee Scheme (NREGS), Sampoorna Grameen Raojgar Yojana (SGRY), Integrated Wasteland Development Programme (IWDP) and Drought Prone Area Programme (DPAP) resources are deployed to conserve water and enhance the irrigation potential but they are not reflected in the sectoral allocation for irrigation.

The outlays also do not reflect the private sector investment for key public infrastructure like roads, power etc. e.g. over 525 Kms of roads costing Rs. 1,519.12 crores are being developed through PPP mode using VGF but these investments are not getting reflected in the above sectoral allocations.

Underlying Approach: In a complete departure from the past practice of designing the schemes in the four walls of Mantralaya, an entirely novel approach was adopted to determine the priorities for different sectors and design of schemes. The approach for the design of schemes and programmes across different sectors was essentially to consult the most relevant stakeholders in those sectors to identify the priorities and programmes for use of public resources. Towards this end, a series of Panchayats of women, farmers, Scheduled Tribe representatives, Forest Committee members etc. were organized to consult them on their priorities and programmes for the eleventh plan were designed accordingly.

Agriculture and allied activities: They are the main stay of state's economy not only because they contribute about 26 percent of state domestic product but more so because they employ about 71 percent of the total work force. Improvement in agriculture growth is necessary for greater equity as also to provide market for industry and services. To achieve 5 percent rate of growth through this sector, the plan aims at increasing productivity through inputs like more irrigation in rain fed areas, improved seeds with increased seed replacement rate, increased and balanced use of fertilizers, encouraging organic farming through use of organic and green manures, bio-pesticides and bio-fertilizers, creating protective irrigation and improving water harvesting through micro-minor, improving ground water recharge through water conservation campaign, construction of field ponds (Balram Talaab etc.) and extension reforms through Agricultural Technology Management Agency(ATMA), institutional and capacity building, using PPP model and role of a facilitator to promote the growth of micro, small and medium enterprises, which would also be an important source of employment. The new Micro, Small and Medium Enterprises Development Act 2006 will facilitate growth of such industries and service sector. Computerisation of Employment Exchanges, converting them into counseling centres, expanding entrepreneurship development programmes, and recognizing service enterprises for industrial policy concessions will also contribute to achieving the targeted 8 percent growth in services.

Poverty reduction: Efforts at reduction of poverty will require multi-sectoral interventions to create on farm and off-farm employment opportunities, value addition in agriculture, food processing and forestry sector etc. and better targeting of resources.The departments of Rural Development and Urban Development specifically implement programmes directly aimed at reducing poverty. Broad strategies adopted by these departments include organization and development of SHGs for microcredit and micro-enterprises, facilitating credit, development of capacities and forward and backward linkages for self employment, providing wage employment during lean season, creation of productive assets on community lands and on individual lands of poor farmers etc.

Rural Development: One of the key goals would be to bring down the proportion of people below poverty line to 25 percent by the end of Eleventh Plan.This will be done through effective implementation of various Centrally Sponsored Schemes like NREGS, SGSY, SGRY, IWDP, DPAP etc. and externally funded programmes of DP1P and MPRLR and state's SGSY programme. The state has been a front runner in mplementation of NREGS providing wage employment of 1,485.72 lakh mandays in 2006-07 by December, 2006. The state has organized and developed over 3 lakh, SHGs who have collectively mobilized over Rs. 100 crores of croup corpus, which is used to provide micro credit for consumptive and productive loans. The SHGs strategy has been found to be quite effective for economic and social empowerment of women and weaker sections. Besides Rs. 1,365.36 crores provided for Rural Development Sector in Annual Plan of 2007-08, Rs. 3,139.48 crores are likely to be available as central share through various CSSs in RD Sector. Together, they constitute about 43.5 percent of the proposed State Plan outlay for 2007-08.

National Rural Employment Guarantee Scheme (NREGS): The state has been the best performer in the country in providing job cards and providing employment to the needy. Over 43 lakh families have been provided job cards and more than 1485 lac man-days were generated upto Dec. 2006. Nearly 1,50,000 works have been sanctioned, of which nearly 50 percent have been completed. Nearly 75 percent of the works relate to water conservation and 15 percent, to rural connectivity.This demand driven scheme could play a key role in enhancing the incomes of rural poor and improving the rural infrastructure and create productive assets, which could provide sustainable livelihoods.

Rural Housing: There are nearly 37.5 lakh families without a house or have a thatched kutcha house. In spite of the programme being under Bharat Nirman, the state receives an allocation for constructing only 46,000 houses, which is even less than the allocation to Kerala, even though Kerala is a smaller and more prosperous state compared to M.P The state government has decided to provide an allocation of Rs. 32.00 crores under Mukhya Mantri Awas Yojana for constructing houses on the same pattern as IAY for SC and ST houseless families.

Urban Development: During next 5 years, in urban sector, the Government would mainly concentrate on urban infrastructure development, solid waste management, water supply schemes slum development etc. in order to augment the basic civic amenities and infrastructure. GoMP was one of the first states to prepare City Development Plans of four cities and get projects approved under JNNURM and Integrated Housing and Slum Development Programme (IHSDP) of Government, of India. During 2007-08,35 ongoing projects and 15 new projects will be taken up under JNNURM and during the Five Year Plan, a total of 55 projects are proposed to be carried out. Similarly, under IHSDP, 20 ongoing projects and 30 new projects will be implemented during 2007-08, and a total of 150 projects will be carried out in the 11th Five Year Plan. The department will continue to implement Swarna Jayanti Shahari Rojgar Yojna (SJSRY) for self employment of the poor and for providing wage employment.

Rs. 526 crores have been provided under the scheme for infrastructure development in 125 small and medium towns under the Urban Infrastructure Development Scheme of Small and Medium Towns (UIDSSMT).
With assistance from Department for International Development (DFID) of UK, the government has launched Madhya Pradesh Urban Management Program (MPUSP) in 4 major cities (Indore, Bhopal, Gwalior and Jabalpur) of the state. The financial assistance is meant for Urban Management, Democratic Administration and basic facilities to the poor. MPUSP would provide with financial assistance of Rs. 320 crores for coming 5 years.

Irrigation: Only about 37 percent of the net sown area has irrigation facility leaving large population of farmers particularly the small and marginal farmers to the vagaries of monsoon. The broad strategy and priorities proposed for the Eleventh Plan are to complete ongoing projects, make much more effective use of irrigation facilities created both from existing and new schemes, and to improve and restore old irrigation schemes. During Eleve'nth Plan emphasis has been laid to obtain funds or loans from AIBP, NABARD and multilateral funding agencies like JBIC, World Bank etc. State Govt, has made a provision for such loans in the plan. MPWSRP and creation of Command Area Development Cell in the WRD department will help in enhancing the utilization of created capacities.
It is proposed to create 7.06 lakh hectare additional irrigation potential through irrigation projects to be implemented by the WRD department. 3.56 lakh hect. potential is proposed to be created through the schemes being implemented by NVDA. Besides, substantial irrigation potential will be created through schemes of Rural Development and Agriculture Development Departments. The watershed development and water conservation programmes will also help develop irrigation potential in the private sector through wells and tube-wells etc. These investments are expected to play a critical role in enhancing growth in agriculture and horticulture in the Eleventh Plan.

Energy: The present installed capacity of MPSEB as on 31.3.2006 is 2,990.45 MW comprising of 2,147.5 MW Thermal and 842.95 MW Hydel capacities. Further, it has a share of 1,665.85 MW in the central sector projects and additional allocation of 50 MW is available from EREB. Apart from the above, 1,000 MW from Indira Sagar HEP and 712.5 MW share as on 31.3.2006 from Sardar Sarovar HEP (Inter State) from NVDA is available. The total available power from MPSEB and NVDA is anticipated to be 5509.45 MW at the end of the tenth plan.

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