Curtains will soon come down on Five Year Plans

Curtains will soon come down on Five Year Plans

Curtains will soon come down on  Five Year Plans

Curtains will soon fall on the Five Year Plans as the fledgling NITI Aayog, that replaced the Planning Commission, takes root.

However, there were clear indications that the Modi government will not scrap the 12th Five Year Plan which was drafted during the erstwhile UPA regime and came into force in 2012-13.

“The 12th Five Year Plan will continue in the transition period as we shift from Planning Commission to NITI Aayog,” government sources said. The issue came up for discussion at the first meeting of the Governing Council of the NITI Aayog chaired by Prime Minister Narendra Modi here.

The sectoral plans, as envisaged by the NITI Aayog, would start rolling out in the 12th Plan period and the state plans would also continue for the next two financial years, the source said.

However, the 12th Plan would be the last five year plan as NITI Aayog would be on a firmer footing by 2016-17, the final year of the 12th Plan.

“We are carrying out a mid-term review of the 12th Plan,” said Finance Minister Arun Jaitley adding that some suggestions on the status of the plan were made during the meeting.

The NITI Aayog or the National Institution for Transforming India was constituted by the Modi government on the New Year’s Day, replacing the Planning Commission set up by first prime minister Jawaharlal Nehru in 1950.

In its 65-year history, the Planning Commission had drafted 12 Five Year Plans and six annual plans involving fund outlays of more than Rs 200 lakh crore.

“The Planning Commission lacked flexibility; the states had to approach it with their demands. NITI Aayog has a flexible approach. Decisions will be taken in consultation with the state governments,” Maharashtra Chief Minister Devendra Fadnavis told reporters.

The 12th Plan document had estimated an average annual growth of eight per cent during the plan period– 2012-13 to 2016-17. It also put forth two different scenarios with the first projecting 6-6.5 per cent average growth a year if economic reforms were inadequate and another projecting 5-5.5 per cent growth if there was a logjam. The first two years of the plan period saw an average annual growth of 4.6 per cent. 

However, last month, the government changed the method of computing economic growth rate, as well as the base year. Now, the growth target will have to be reworked in light of these changes.

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