The Planning Commission in its mid-term appraisal (MTA) of the Eleventh Five Year Plan (2007-12) gave its suggestions regarding policies and reforms in critical sectors such as
infrastructure and
energy.
Planning Commission deputy chairman, Mr Montek Singh Ahluwalia, told the press after the meeting of the Commission that the growth momentum was picking up again thereby giving India the confidence to achieve higher growth of 9-10 per cent in the Twelfth Plan (2012-17).
The MTA, which was cleared by the Planning Commission on March 23, 2010, said the path of fiscal correction is crucial for macro-economic credibility and larger private investment. The MTA also prescribed a host of policy reforms for various sectors. It has suggested a sound monitoring system with regular audits by Comptroller and Auditor General of India (CAG) for all centrally sponsored schemes (CSS). These would also include those being implemented by special purpose vehicles (SPV) created jointly by the state departments and the private sector.
The MTA has also suggested a special fast tracking mechanism for giving environment and forest clearances specifically for projects related to energy sector. This has also the support of the Prime Minister, who directed Planning Commission to come out with suggestions for the same. The appraisal has also called for opening up coal mining to the private sector encouraging both private and public sector companies to go in for acquisitions abroad to build energy security. This MTA document will now be placed before the Cabinet followed by the National Development Council (NDC) for final approval.
The private sector is also now expected to participate with at least half of the over US$ 1 trillion-dollar investment planned in infrastructure in the 12th plan (2012-17). The increase in private sector investment during the ongoing Plan is highest in the
telecom sector where the final achievement is likely to be 1.59 times than originally estimated.
Of the total investments, private sector investments accounted for 80 per cent in ports, 82 per cent in telecom, 64 per cent in
airports, 44 per cent in electricity, 16 per cent in
roads and about 4 per cent in railways. The Planning Commission projections for the 12th Plan call for investment flows of almost US$ 1,024.81 billion. In fact, with the country focussing majorly on developing infrastructure including huge ports, experts such as Paul Jensen, Director of Delhi-based consultants European Business & Technology Centre, too feel that if the economy grows by 8-9 percent a year, then the demand for logistics services would increase by 14 per cent and that was the opportunity being eyed by everybody.
The Prime Minister in the meanwhile, while attending a conference on “Building Infrastructure: Challenges and Opportunities”, promised a renewed focus on infrastructure that will need US$ 1 trillion in investment during 2012-17. He also said that India will grow at 8.5 per cent next fiscal, racing to 10 per cent in the medium term.
Previously, Commerce and Industry Minister, Mr Anand Sharma on March 23, 2010, expressed confidence that the size of Indian economy was likely to double to US$ 2.5 trillion by 2015. "We will see India doubling its GDP in the next five years to US$ 2.5 trillion," Sharma said at the 44th convocation of the Indian Institute of Foreign Trade (IIFT). Significantly, India is the second fastest growing economy in the world with its GDP estimated at US$ 1.2 trillion in 2008-09.