Growth in 2016-17 would be 7% to 7.75%, NITI Aayog says
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 per cent to 7.75 per cent.
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 per cent 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 per cent in 2016-17, the last year of the Twelfth 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 per cent 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.
Referring to agriculture, the NITI Aayog's document said that the raising productivity in agriculture is the immediate means to bring relief to vast number of poor.
"But bringing genuine prosperity to them in the long run would require the creation of good jobs in industry and services," it stressed.
The document observes that India's challenge is not just rapid growth in manufacturing in general but also ensuring healthy growth in labour-intensive sectors such as clothing, leather manufacturing, food processing and electronic assembly, the official said.
"Growth in these sectors would help create good jobs for workers with limited skills thereby allowing workers in agriculture and informal sector manufacturing and services to migrate to the formal sector."
"Simultaneously, with migration of workers out of agriculture, land area per worker in the sector would rise, raising output per worker," as per the document.
Going forward, India needs to take several steps to revive and sustain growth in agriculture.
It said there is a need to shift towards high value commodities such as horticulture, fisheries and livestock.
The document also stressed for need of reforming the Agriculture Marketing Committees (APMC).
Referring to social schemes that aim to promote specific social games, the NITI Aayog's appraisal document says that Integrated Child Development Services (ICDS) programme, mid-day meals scheme, and National Health Mission require a closer scrutiny so that they can be made more effective.