NEW DELHI: An internal appraisal report of the 12th five-year Plan recommends that the government create more jobs, push skill development and infrastructure, simplify labour laws and land acquisition, adopt tax reforms, offer clear tax policies, and focus on manufacturing. These measures, the report notes, will help in ease of doing business, attract foreign direct investment and also achieve a GDP growth of 7-7.75 per cent in 2016-17 (current financial year), the terminal year of the 12th Plan.
However, the report containing nine chapters does not take into account the impact of demonetisation. “The report was already late and it would have lost reason, if we had waited for the data on demonetisation… it will come with the next CSO (Central Statistics Office ) numbers,” a top government official said.
The government has already decided to do away with the practice of preparing annual Budgets on the basis of five-year Plans from the next financial year.
According to the senior government official cited above, the upcoming Union Budget must address the issues of job growth seriously to address different dimensions of poverty. “Growth must raise the wages and create large volume of good jobs for workers. Sustained rapid growth must also be employment-friendly,” the official noted.
Simplification of tax laws is critical, the official said, adding: “It is important to spell out clearly the regulations, thereby minimising the discretion on the part of the tax officials.”
The Budget is likely to give focus on job growth, to stimulate labour-intensive sectors such as manufacturing, real estate, textile, furniture, and electrical and electronic sectors. The 12 Plan, under the new GDP series, as envisaged in the Economic Survey 2015-16, is well within the reach, the official said.
“There are reasons to be cautiously optimistic about the prospects of above 8 per cent growth in 2016-17,” the official added. Meanwhile, in a related development, NITI Aayog is expected to come out with a three-year action plan by the end of March to help accelerate economic growth and make it more inclusive. This report will have an analysis on the impact of demonetisation on the economy, especially on the informal sector.
NITI Aayog is also preparing a 15-year vision document and a seven-year strategy to guide the government’s development plans till 2030.