Focus now on creating jobs: NITI Aayog tells government

The Aayog said that the economy had done worse than the 'policy logjam' scenario envisaged during the first two years of the 12th Five-Year Plan

The government should focus on labour-intensive sectors such as electronics, food processing, leather, textiles and garments to create good jobs, weaning away people from agriculture, says the mid-term appraisal by the NITI Aayog of the 12th Five-Year Plan (2012-13 to 2016-17).

This was supposed to be the last such exercise for five-year plans before the proposed 15-year ‘Vision Document’, followed by a seven-year strategy and three-year action plan takes shape from 2017-18.

It has also said that the economy had done worse than the ‘policy logjam’ scenario envisaged earlier in the Plan.

This happened during the first two years, in 2012-13 and 2013-14.

On the basis of the earlier gross domestic product series, the first two years of the Plan could deliver only 4.7 per cent yearly growth.

The erstwhile Planning Commission had projected 5-5.5 per cent a year growth as a 'worst case' among three growth scenarios, depending on policy action by the government.

Measured by new-series gross domestic product data, the growth averaged 6.7 per cent in the first four years of the 12th Plan, of which agriculture grew at a dismal 1.6 per cent annually, primarily due to droughts in 2014 and 2015.

However, the new series could not be compared with the 12th five-year projections, based on the old method of GDP calculation.

The appraisal is to be given to the governing council of NITI Aayog. The council is headed by Prime Minister Narendra Modi and comprises state chief ministers and Union cabinet ministers.

"I would expect a meeting next month, where we can present the appraisal," said NITI Aayog Vice-Chairman Arvind Panagariya.

The review, he said, indicated the state of the economy had improved in the third and fourth years of the plan, 2014-15 and 2015-16.

And, would move to a high growth trajectory from this year, also the concluding one.

Besides doing away with five-year plan documents, the government is also doing away with the distinction between Plan and non-Plan expenditure from 2017-18.

Breaking away from past tradition, the appraisal is based on nine broad themes -- overview of economy and policy, macro economic factors, governance, human resource development, physical infrastructure, environment sustainability, agriculture and rural transformation, and urban transformation.

The review stresses on creating conditions for sustained, rapid growth that is also employment-friendly.

And, designing and implementing social programmes to address different dimensions of poverty, by using the expanding revenue made possible by growth.

Panagariya said the Aayog had already started interaction to prepare the vision document and strategy paper.

“We will see expected growth in implied tax and non-tax revenue, and how these can be deployed," he said.

They'd be ready with the draft of these policy documents before the next Union Budget was presented, he said.

Image: Photograph: PTI