12th Plan appraisal optimistic over 7% growth in FY17

3-year plan to be introduced this April

 The 12th Five-Year Plan appraisal document, prepared by Niti Aayog has made a strong case for clear tax policies and focus on manufacturing, even as it exuded confidence that growth in 2016-17, the final year of the Plan would be 7% to 7.75%.

The appraisal document for the 12th Five Year Plan (2012-17), which according to a senior government official was prepared by Niti Aayog without taking into account impact of demonetisation, also talked about 8% growth under the optimistic scenario, but it may not be possible now.

The 12th Plan is the last Plan as the government has decided to replace five-year plans with three-year action plan beginning April 2017.

“With the policy changes and governance improvements introduced by the new government since taking charge and those contemplated, acceleration to 7 to 7.75% in 2016-17, the last year of the 12th Plan, under the new GDP series, as envisaged in the Economic Survey 2015-16, is well within the reach,” the official said quoting the appraisal document for the 12th Five Year Plan. “In sum, there are reasons to be cautiously optimistic about the prospects of above 8% growth in 2016-17,” he added.

The official, however noted that the caution is essential as well since the reforms in many areas such as skill development, infrastructure, labour laws and the Land Acquisition Act of 2013 are far from complete.

Noting that the commitment of the present government to initiate no new inquiries into retrospective tax liability is very welcome move towards India’s reputation, the appraisal document, “it is important to spell out clearly the regulations thereby minimising discretion on the part of the tax officials.”

According to the document, the DIPP and the Niti Aayog are engaged in a collaborative effort to bring out the best practices to Indian cities and states in many of doing business areas.

“This should bear fruit in the next year or two in improving the image of India as an investment destination as well as bringing the cosy of doing business down,” it observed.

Caution on growth prospects

There are reasons to be cautiously optimistic about the prospects of above 8% growth in 2016-17, says an official

Caution is essential since the reforms in many areas like skill development, labour laws are far from complete

Niti Aayog’s document said that the raising productivity in agriculture is the immediate means to bring relief to vast number of poor