[Year]

BUSINESS
ENVIRONMENT
REPORT

[Type the author
name]

[ 12TH FIVE YEAR PLAN
(2012-2017) ]
[Type the abstract of the document here. The abstract is typically a short summary of the contents
of the document. Type the abstract of the document here. The abstract is typically a short
summary of the contents of the document.]
BUSINESS ENVIRONMENT REPORT

12th Five Year Plan (2012-2017)





Submitted To - Prof. Shallini Taneja
Department of Economics and Business Policy
Submitted by
Aayushi Singh (221002)
Ankit Kumar (221026)
Deeptiman Dasgupta (221039)
Gagandeep Chawla (221046)
Gaurav Maheshwari (221049)
Presentation Date - 14/02/14
ACKNOWLEDGEMENT
We express our sincere gratitude to Prof. Shallini Taneja Gupta, Department of Economics and
Business Policy, FORE School of Management, for her encouragement, constant support and
guidance. Her support has been invaluable in completion of the project. We would also like to
place on record the sincere efforts taken by her in giving all minor details about the subject and
express our heartfelt thanks for the same.
We also thank FORE School of Management, New Delhi for providing us with an opportunity to
work on this great report.



















Contents
Introduction .................................................................................................................................... 4
Mission and Vision ......................................................................................................................... 4
Agenda ....................................................................................................................................... 4
Current Situation: ........................................................................................................................ 5
Water ............................................................................................................................................. 6
Health ............................................................................................................................................. 6
Education ....................................................................................................................................... 7
Agenda ....................................................................................................................................... 7
Initiatives .................................................................................................................................... 7
Schemes ..................................................................................................................................... 7
Twelfth plan strategy:- ................................................................................................................ 8
Employment and Skill Development ............................................................................................... 8
Current Employment Scenario .................................................................................................... 8
Action Plan .................................................................................................................................. 9
RURAL SECTOR .............................................................................................................................. 9
Current Issues: .......................................................................................................................... 10
Twelfth Plan Strategy ................................................................................................................ 10
Understanding: ......................................................................................................................... 11
INDUSTRY .................................................................................................................................... 11
Challenges................................................................................................................................ 11
Twelfth Plan Strategy ................................................................................................................ 12
NMZs ........................................................................................................................................ 12
Understanding .......................................................................................................................... 12
HEALTH ........................................................................................................................................ 12
Goals& Targets ......................................................................................................................... 12
Present Status ............................................................................................................................ 13
Concerns .................................................................................................................................. 13
Twelfth Plan Strategy ................................................................................................................ 13
Priorities ................................................................................................................................... 13
Understanding .......................................................................................................................... 14
Conclusion ................................................................................................................................... 14
References ................................................................................................................................... 15

Introduction

The objective of twelfth five year plan is Faster, Sustainable and Inclusive Growth. There are some
weaknesses that need to be addressed and new challenges that need to be faced. For preparing this 12
th
five
year plan, the planning commission wanted inclusive growth and to include the people in the growth and
planning of development of country, suggestions were demanded from people and many other organisations.
In response to it over 950 civil society organisations, business associations, media and individuals gave their
suggestions for the planning and then the plan for faster, sustainable and inclusive growth was finalized. This
also caused delay in implementation of the plan.
The main focus sectors of the twelfth five year plan are as follows:-
1. Infrastructure
2. Health
3. Education

The targets for the 12
th
five year plan are:-
1. Average growth target has been set at 8.2 % down from 9% in the 11
th
five year plan due to the slow
economic scenario.
2. Total plan size has been fixed at Rs 47.7 lakh crore.
3. 12
th
plan seeks to achieve 4% growth in agriculture sector.
4. Health would include focus on drinking water and sanitation.
5. Plan to bring down Poverty by 10%.
6. Implementation of Direct cash transfer of subsidies in food, fertilizer and petroleum. To reduce fiscal
deficit.
Mission and Vision

Faster, Sustainable and More inclusive growth
The need for faster growth: Planners are sometimes criticised for focusing too much on GDP growth, when the
real objective should be to achieve an improved quality of life of the people across both economic and non-
economic dimensions. The Twelfth plan fully recognises that the objective of development is broad-based
improvement in the economic and social conditions of our people.
Two reasons why GDP growth is important for the inclusiveness objective:-
a) Rapid growth of GDP produces a larger expansion in total income and production which, if growth process is
sufficiently inclusive, will directly raise living standard.
b) The more the number of people involved, higher the revenue is generated.
Agenda
8.2% growth rate is targeted over next 5 years
To bring macro imbalances under control and to reverse the slow down
Push for structural reforms to maintain medium term growth
Current Situation:
Twelfth five year plan commenced during 2
nd
financial crisis of the world precipitated by the sovereign
debt problems of the Euro zone which erupted during the initial years of the plan
Already two years passed in the plan, only 5% growth rate have been achieved
Current account deficits stands around 5%, reducing the CAD is one of the main objective of the
Twelfth five year plan.
Foreign exchange reserves are sufficient but as CAD is to be reduced some external means found out
to finance projects important for growth. FDI is one of the important policy through which government
has planned to give the required boost.
Political instability in the country is also a big cause for concern. Due to this lot of important projects
are getting delayed which may upset the investors and the whole motive of attracting foreign
exchange will be dissolved.
The Twelfth five year plan is divided in 3 volumes


Faster, More
Inclusive
and Sustainable
Growth
1) Water
2) Land Issues
3) Environment
4) Science &
Technology
5) Innovation
6) Governance
7) Regional equality
Economic
Sectors

1) Agriculture
2) Industry
3) Energy
4) Transport
5) Communication
6) Rural Development
7) Urban development
Social Sectors

1) Health
2) Education
3) Employment and
skill development
4) Women and child
rights
It is not possible to cover all the sectors in detail, so we will be covering few big sectors in detail and rest we
will give a snapshot.
We have included following sectors
1) Faster, More Inclusive and Sustainable Growth - Water
2) Economic Sectors- Industry, Rural Development
3) Social Sectors- Health, Education, Employment and skill development, Women and child rights

Water
The Indian economy and society face daunting challenges in the water sector. The demands of a rapidly
industrialising economy and urbanising society come at a time when the potential for augmenting supply is
limited, water tables are falling and water quality issues have increasingly come to the fore. The Standing
Subcommittee of the Ministry of Water Resources estimates total water demand rising to 1,093 BCM in 2025,
which reaffirms a comfortable scenario at the aggregate level even in 2025.
Need for a Paradigm shift
Major and Medium irrigation reforms
Improving water use efficiency
Watershed restoration and groundwater recharge
New approach to rural drinking water supply on population basis
Integrate urban water supply with sewage systems
Emphasis on recycle and reuse of water
New legal and institutional framework
Basin approach for water planning and management

Health

Health should be viewed as not merely the absence of disease but as a state of complete physical, mental and
social well-being. The determinants of good health are: access to various types of health services and an
individuals lifestyle choices, personal, family and social relationships.
At present, Indias health care system consists of a mix of public and private sector providers of health services.
Networks of health care facilities at the primary, secondary and tertiary level, run mainly by State
Governments, provide free or very low cost medical services.

Following are the problems that the health sector is facing:-

1. Availability of health care services from the public and private sectors taken together is quantitavely
inadequate.
2. Quality of health care services varies considerably across private and public sector.
3. Affordability of health care services is a serious problem for vast majority of the population, especially in
tertiary care.
Education

Education is the most important lever for social, economic and political transformation. Education also acts as
an integrative force in society, imparting values that foster social cohesion and national identity. Education
expenditure as a percentage of gross domestic products (GDP) rose from 3.3% in 2004-05 to over 4% in 2011-
12. Per capita public expenditure on education increased from Rs. 888 in 2004-05 to Rs 2,985 in 2011-12.

Education and Literacy

Youth literacy rate increased to 91%
Growth in enrolment ratio from 6.27 in 2009-10
Adult literacy improved to 74% in 2011
Gender gap declined
Significant reduction in socio-economic inequality in access to education
Agenda

Ensure universal access in keeping with the letter and spirit of RTE act
Improve attendance and reduce dropout rates below 10%
Increase enrolments at higher level of education and raise the GER
Raise overall literacy rate
Reduce gender gap below 10%
Improve learning outcomes that are measured, monitored and reported independently at all levels
Initiatives

Setting up all the 6000 high quality model schools at block level, 3500 schools in partnership with
states approved and 2500 model schools in PPP mode.
Upgradation of 11,200 upper primary schools to secondary schools to meet demand
Direct transfer of scholarships linked with Aadhar card.
Ensuring 100% trained teachers in all schools
Pace setting Role for KVs
Increase in capacity of 44,000 existing government secondary schools
Schemes

1) Sarva Shiksha Abhiyaan:- Universal access and retention, bridging the gender and social gaps in
enrolment levels and enhancement of learning levels of all children.

12
th
plan Strategy: The overarching goal of the Twelfth Plan is to enrol OoSC, reduce dropouts and
improve learning outcomes across the elementary school years. In order to enrol OoSC, strengthening
of institutional capacity, developing an appropriate statistical base, harmonising the definition of OoSC
and finally identification and mainstreaming of all children into age-appropriate class would be
needed. Reduction in dropout rates is closely linked to quality. There is a need for a system-wide effort
to move the focus of all activity in elementary education from schooling to learning.
2) Mid Day Meal Scheme (MDMS):- The Scheme was launched in 1995 to enhance the enrolment,
retention, attendance of children in schools apart from improving their nutritional levels. This was
extended to upper primary in 2007 and universalised at the elementary level in the year 2008

12
th
plan strategy:- Expansion to pre primary to cover as much as possible in a progressive manner.
Also there will be tax exemptions to encourage the private participation from the corporate houses.
There will be active front on the partnerships and municipalities, as well as with other NGOs to ensure
good quality, nutritious supply of food. There is an NGO for every 600 in India, NGOs have great
potential which is still untapped. Building schemes on basis of NGOs is part of the strategy by
government to boost the education sector.
MDMS was criticised last year due to various mid day meal horror schools due to bad quality infected
food served to students which resulted in deaths as well. Government has come up with the idea of
MIS portal for monitoring the scheme using information technology.

3) Saakshar Bharat:- During the eleventh plan, Saakshar Bharat a centrally sponsored scheme that
focused on women in particular and the disadvantaged groups in general, was launched. It is currently
in operation in 372 districts. Under this scheme, functional literacy would be provided to 70 million
adults in the age group of 15 years and above.

Saakshar Bharat is conceived as a variant of National Literacy Mission (NLM), yet due
to hiatus during the Tenth Plan period, management structures under the NLM had become moribund.
Thus, galvanising the implementation machinery for Saakshar Bharat was a huge challenge.

Twelfth plan strategy:-

Flagship scheme for adult education
To raise the literacy rate to 80%
Gender gap less than 10%
Special focus on young adults (15-19 yrs)
AESDCs Adult education and skill development centers would be strengthened.
Employment and Skill Development
Current Employment Scenario
11
th
Plan targeted creation of 58 million job opportunities - 18 million work opportunities created on
CDS basis between 2004-05 & 2009- 10.
Unemployment rate declined from 8.28% in 2004-05 to 6.6% in 2009- 10 on CDS basis & from 2.3% to
2% on UPSS basis.
LFPR declined from 43% to 40% & WFPR from 42% to 39.2% between 2004-05 and 2009-10.
Increase in Salaries and Wages of regular & casual workers between 2004-05 and 2009-10.
Share of informal sector employment increased marginally from 92.4% (2004-05) to 92.8% (2009-10).
Sectoral share: Decline in agriculture & manufacturing, increase in non-manufacturing which includes
construction, marginal increase in services.

Action Plan

1) Thrust on Manufacturing Sector to make it the engine of employment growth that would create 10
million additional jobs during the 12
th
Plan.
2) To bring in supportive policies to incentivize labour intensive manufacturing sectors such as textile &
garments, leather & footwear, food processing, gems & jewellery to generate more employment.
3) Expanding employment in services like IT, finance & banking, tourism, trade & transport.
4) Prioritizing skill training for the informal sector; creation of appropriate skill sets among rural migrants
and urban poor to make growth inclusive
5) Ensuring the employability of skill training by involving Sector Skill Councils in preparation of Skill
Modules matching market demand.
6) Building on the potential of Modular Employable Skill programme by ensuring combination of modules
to guarantee employability.
7) Extending Social Security benefits to Unorganized Sector workers.
8) Streamlining the skill development programs for disadvantaged sections to ensure much larger funding
for skill development
9) Setting up of National Skill Registry to link data bases across Ministries/States to provide a platform
linking people who seek/provide employment.
10) Enable skill loans for poor students (Credit Guarantee Fund)
Expected Outcomes by 2017

To create 50 million additional non-farm job opportunities in manufacturing and service sector.
Increase skilled workforce to at least 50 million
Doubling the annual training capacity from the existing 4.5 million.
Increase percentage of workforce receiving formal training from present 10% to 25%.
RURAL SECTOR

Rural Sector growth is very important for the main motive of the 12
th
five year plan (2012-17) i.e. Inclusive and
Sustainable growth. Over 70 percent of Indian population still lives in rural areas of our country and among
them 59 percent are dependent on agriculture sector.
Rural development programmes cover employment through the Mahatma Gandhi National RuralEmployment
Guarantee Act and the National Rural Livelihoods Mission, housing via the Indira Awaas Yojana and other State
schemes and bank support, sanitation through the Total Sanitation Campaign, Provision of drinking water via
the National Rural Drinking Water Programme, social security through The National Social Assistance
Programme, water shed development via the Integrated Watershed Management Programme, road
connectivity through the Pradhan Mantri Grameen Sadak Yojana and electrification via the RajivGandhi
GrameenVidyutikaranYojana.

Current Issues:
Availability of health care services is inadequate
In India, Availability of health care services from the public and private sectors taken together is
quantitatively inadequate. The number of doctors and nurses per lakh of population is very less. One
reason for overall shortage is that its due to wide geographical variation in availability across the
country. Rural India is poorly served.
Poor Accessibility through Roads
Roads are not developed, and accessibility to remote rural areas is poor. Due to which proper
healthcare facilities, Education, are still not present. Poverty and other social issues also still exist.
Poor Social Indicators
The social indicators like Child Sex Ratio, Infant Mortality Rate etc are very poor across the country
especially in the rural sector.
Lack of Skill development
Along with low literacy rates people in rural areas lack the skills and hence dont get jobs easily. This
leads to unemployment and poor standards of living.
Backward Sections
Social Inclusion is the norm that the Government plans on working on. Many SC, ST sections needs
addressing to improve their quality of living.
Twelfth Plan Strategy

The twelfth five year plan seeks to strengthen the initiatives taken in the eleventh plan to achieve faster,
sustainable and Inclusive growth. To achieve this Inclusive growth, participation of people is required. The
devolution of powers to Panchayati Raj Institutions (PRIs) is one of the fist initiatives required for faster
decision making and faster growth. Improvement in rural infrastructure in terms of connectivity, access to
electricity, education, safe drinking water, hygienic sanitation, employment generation are the major
objectives of the rural transformation plan.


Fig. Sustainable Rural Development 4 Key Approach

Understanding:
The 12
th
Five year plan gives a lot of importance to social inclusion and rural development. Aligning the social
status is of primary importance in growth and the plan rightly gives impetus in addressing all sections of the
society. With more importance to schemes like MNREGA, the government would make substantial investment
in bringing up the poor and improving per-capita income. Though, this has been a primary target since its very
inception, poverty has only marginally declined over the last five year plans. Even then, there is a strong need
for social equality and the plan addresses the same.
INDUSTRY
Challenges

No importance given to Intellectual Properties. IPs lost to other countries who filed them first
Shortcoming of the regulatory framework, speed of award of IPs and its enforcement
Though there is an improvement in the industry-academia collaboration in creating
patents/technologies, still there is a large scope for improvement.
While FTAs signed with other countries are favourable for some products, they often create a
distortion in the market in terms of inverted duty structure for other products.
Many segments of the industry, especially MSMEs, have limited information and access to risk capital
for sourcing/developing and internalising new technologies.
The weak attention to standards not only invites dumping of sub-standard products by other countries
but also makes it difficult for the industry participants to benefit from each



Fig. GDP and Growth rate Comparison
Though the manufacturing sector grew significantly and consistently, it still contributed lowly to the National
GDP. The 12
th
five year plan addresses the need for innovation and acknowledges its importance.
Twelfth Plan Strategy
Increase manufacturing sector growth to 1214 per cent over the medium term to make it the engine
of growth for the economy. Contribution expected to reach at 25 per cent of the national GDP by
2025.
Increase the rate of job creation in manufacturing to create 100 million additional jobs by 2025.
Emphasis should be given to creation of appropriate skill sets among the rural migrant and urban poor
to make growth inclusive.
Increase depth in manufacturing, with focus on the level of domestic value addition, to address the
national strategic requirements.
Enhance global competitiveness of Indian manufacturing through appropriate policy support.
Ensure sustainability of growth, particularly with regard to the environment.
NMZs
The government plans to extensively use National Manufacturing and Investment Zones as hubs that would
help in flourishing the manufacturing sector. These NIMZs are basically bigger sized SEZs.
Some of the key features are:
Equipped with world-class infrastructure that would be autonomous and self-regulated, developed in
partnership with the private sector.
Each NMZ to have 5,000 hectares. Land will be selected by State Governments. Preference would be
given to uncultivable land.
Both state and central Government would fund trunk infrastructure.
The policy embodies an easy exit policy and single window clearance in zones.
The NIMZ would be managed by special entity
Understanding

With rapid globalization, it is of utmost importance that Manufacturing is heavily invested on. Developed
countries are self reliant with massive chunks of contribution from their own economy. India needs to follow a
similar structure which would include considering various infrastructural developments to provide a
sustainable manufacturing network.
HEALTH
Goals& Targets
Had set six health outcome indicators as time bound goals
Included lowering MMR & IMR, anaemia among women & girls, fertility & increasing child sex ratio
Except on Child Sex Ratio goals have not been met on other fronts.
Present Status
Low public spending on health(1.97% of GDP), high out of pocket payments (71%) leading to
impoverishment, high levels of anaemia, high levels of malnutrition among children, high
IMR(47/1000) & MMR(212 per 1 lakh live births)
India trails behind other comparable developing nations
Concerns
Growing reliance on private providers, which currently service 78% of outpatients & 60% of inpatients
Rising trend in non-communicable diseases, dual burden of disease
Strategies for provision of inputs & creation of health infrastructure under NRHM have not yet fully
translated into assured health care services
Twelfth Plan Strategy


Fig. Key Target Points

Priorities
Financing: Funding as an instrument of incentive and reform
National Health Mission with universal coverage and greater flexibility to States
Public Health Cadre for decentralized planning, program management, Behaviour Change
Communication, community participation, quality control, HIS, regulation, convergence of social
determinants of health
Access to Essential Medicines in All Public Facilities: Operationalize CPA
Human Resource strengthening
Building effective Health Information Systems
Health Systems Strengthening & Promoting Research
Practice & promotion of AYUSH
Understanding

The government of Indias twelfth five year plan on health focuses on strategies to deliver preventive
and curative public health services. The key focus is on Universal Health coverage. This five year plan
emphasizes on this point that every citizen in this country across all strata of the society would be provided
with a decent health care framework. Use of private-public partnership is of key relevance in attaining the
same.
Conclusion

The government on 4th October approved the 12th five year plan (2012-17) document that seeks to achieve
annual average economic growth rate of 8.2 per cent, down from 9 per cent envisaged earlier, in view of
fragile global recovery. This is an environment of great promise but also one that presents major challenges.
Much of what needs to be done to accelerate GDP growth to 8.2% so will be done by the private sector, but
the central and state governments have a crucial role to play in providing a policy environment that is seen as
investor friendly and is supportive of inclusive growth.
The theme of the Approach Paper is faster, sustainable and more inclusive growth. According to officials the
projected average rate gross capital formation in the 12th Plan is 37 per cent of GDP. The projected gross
domestic savings rate is 34.2 per cent of GDP and the net external financing needed for macro-economic
balance has been placed at 2.9 per cent of GDP. Besides other things, the 12th Plan seeks to achieve 4 per cent
agriculture sector growth during 2012-17. The growth target for manufacturing sector has been pegged at 10
per cent. The total plan size has been estimated at Rs.47.7 lakh crore, 135 per cent more that for the 11th Plan
(2007-12).
To ensure the best utilization of the allocated funds, the efficiency in implementation of projects on the
ground needs to be greatly improved. Most of what needs to be done in this context rests with state
governments but the central government must find ways of improving project design, prioritising resources to
fund well designed interventions that work, devolving resources to lower levels and helping build capacity.
Thus, evidence-based evaluation is critical for redesign and prioritization.
References

http://planningcommission.nic.in/plans/planrel/12thplan/pdf/12fyp_vol1.pdf
http://planningcommission.nic.in/plans/planrel/12thplan/pdf/12fyp_vol2.pdf
http://planningcommission.nic.in/plans/planrel/12thplan/pdf/12fyp_vol3.pdf
http://www.youtube.com/watch?v=z29VMrVs5Vc
http://www.youtube.com/watch?v=aAeekw2j8x0&list=PLrUn0gzmIWLEpdrbwiQVE2A-QioB5unZn
http://www.youtube.com/channel/UC944h4Cihq4iaNrXfnLehNQ
http://www.youtube.com/watch?v=JYrO391xM94&list=PLrUn0gzmIWLEcXoXP08PdymX48Y2SvKiV
http://planningcommission.nic.in/
http://planningcommission.nic.in/plans/planrel/12appdrft/appraoch_12plan.pdf
http://en.wikipedia.org/wiki/12th_Five_Year_Plan_(Government_of_India)
http://12thplan.gov.in/