12^th Five year Plan

The first five-year plan (1951-1956) was presented to the Parliament of India by the then first Indian Prime Minister, Jawaharlal Nehru. The Five year Plans play an important role in the Indian Economy. These are a set of plans which are laid down and its proper implementation and execution results in the overall development of the economy. The eleventh five year plan completed in 2012 and hence the new 12^th Five year Plan is now on its way. The eleven five year plans pertained to the following time periods:

• 1st Five year Plan: 1951-1956
• 2nd Five year Plan: 1956-1961
• 3rd Five year Plan: 1961-1966
• 4th Five year Plan: 1969-1974
• 5th Five year Plan: 1974-1979
• 6th Five year Plan: 1980-1985
• 7th Five year Plan: 1985-1990
• 8th Five year Plan: 1992-1997
• 9th Five year Plan: 1997-2002
• 10th Five year Plan: 2002-2007
• 11th Five year Plan: 2007-2012

12^th Five year Plan is all set for the implementation. The document mentions about the tax concerns of the investors and also recommendations to allay investor concerns over tax, which would boost the investments soon. The document is all set for its approval before the National Development Council (NDC). Prime Minister Manmohan Singh is the chairperson of the council.

12^th Five year Plan and its Implications

1. Infrastructure

The Planning Commission projected an annual growth of 8.2 percent for the five years till 2016-17 for the Indian economy. The document talks about infrastructure development to a great extent, the document also called for removal of bottlenecks to boost investment in infrastructure. Urgent action needs to be taken, to tackle the constraints in infrastructure projects which are currently under hold. The document also includes the delayed and on-halt infrastructure projects and their need for completion so as to save on the rising costs. There is need to speed up the disbursement of loans for infrastructure development in future, so as to achieve the expected rate of growth.

Read more about India’s Major Construction/EPC/Infrastructure Companies.

2. Taxation & Investor Sentiments

The document suggests that some of the reasons which resulted in the downturn in the investor sentiments could be easily rectified with slight change in policies. There is an urgent need to change the perception among investors, regarding the taxation policy to be introduced in the upcoming budget. The false belief among individuals regarding the tax changes, which is seen as anti-investor policy, needs to be rectified as quickly as possible.

To take care of the investor concerns, and help them to get back the same perception about the capital market and GAAR, two expert committees have been appointed by the Finance Ministry. The document mentions about the policy changes for the coming five years and recommends to reverse the deceleration in growth, by reviving investment as quickly as possible. Apart from these the tax related issues need to be dealt with utmost importance, so that the combined action could create better investment climate.

3. Economic Growth

If we take a quick sneak peek at the recent data released about the growth of the economy, we see that the current economic growth was reported at 6.5 percent in 2011–12, which was 8.4 percent in the previous fiscal; and is further expected to fall to the level of 5.7-5.9 percent. This slowdown can only be reversed with proper corrective actions taken, which includes expansion in investment and increase in savings, so as to tackle the problem of inflation and keep inflationary pressures under control.

Having said this, it is documented at last that India’s growth potential for the coming years could be in the range of 8.5-9 percent which could be reached only in a phased manner as the global economy is expected to be weak during the first half of the Plan period.

Conclusion

Thus to conclude we can say, that the slowdown in the global economy has impacted the Indian economy to a great extent. In order to revive the growth it is very important to revive the investor sentiment, so that a strengthening rupee as a currency can be seen in the international market. This would in turn help in the fiscal deficit level. A proper policy change in the infrastructure development front is required, so as to complete the halted and delayed projects.

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