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Indian Economic Policy Dilfraz Singh, Lovely Professional University

Notes
Unit 3: Eleventh Five Year Plan

CONTENTS
Objective
Introduction
3.1 Eleventh Five Year Plan
3.2 Objectives of the Eleventh Plan
3.3 Financing the Eleventh Plan
3.4 Critique of the Eleventh Plan
3.5 Summary
3.6 Key-Words
3.7 Review Questions
3.8 Further Readings

Objectives

After reading this Unit students will be able to:
• Discuss the objectives of the Eleventh Five Year Plan.
• Understand the Micro-Economic Dimensions of the Eleventh Plan.
• Know the Financing the Eleventh Five Year Plan.
Introduction

th
The National Development Council in December 2006 approved the Approach to the 11 Plan
document titled “Towards faster and more Inclusive growth” and directed the Planning Commission to
prepare a detailed plan to assess the resources required to meet the broad objective set forth in the
Approach Paper. The detailed version of the Eleventh Five Year Plan (2007-12) was approved by the
National Development Council in December 2007.
3.1 Eleventh Five Year Plan

Outlining its vision, the Eleventh Plan noted that ‘the economy accelerated in the Tenth Plan period
(2002-03 to 2006-07) to a record average of growth of 7.6 percent – the highest in any Plan period so
far.’ It emphasized the fact that during the last 4 years of the Tenth Plan, average GDP growth was
8.6% making India one of the fastest growing economies in the world. The saving and investment
rates have also increased. The industrial sector has responded well to face competition in the global
economy. Foreign investors are keen to invest in the Indian economy.
But “a major weakness in the economy is that growth is not perceived as being sufficiently inclusive
for many groups, especially SCs, STs and minorities... The lack of inclusiveness is borne out by data
on several dimensions of performance.”
1. “The percentage of population below the official poverty line has come down from 36% in 1993-
94 to 28% in 2004-05. However, not only this is high, the rate of decline in poverty has not accelerated
with GDP growth and the incidence of poverty among certain marginalized groups, e.g. the
Scheduled Tribes, has hardly declined at all. Because the population has grown, the absolute number
of poor people has declined only marginally form 320 million in 1993-94 to 302 million in 2004-05.
This performance is all the more disappointing since the poverty line on which the estimate of the poor is
based is the same as in 1973-74, when per capita incomes were much lower. “ (emphasis added)

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