The issues like energy, urbanization, water management and environment friendly growth have been identified as the prime issues for the upcoming 12th five year plan. “(These are) four critical challenges facing the economy in the Twelfth Plan, which are perhaps more serious than they were at the start of the Eleventh Plan," Montek Singh Ahluwalia, the Deputy Chairman of Planning Commission has written in an article, to be published in Economic and Political Weekly next week.
Though, he does not dismiss the inclusion of other important issues to be tackled. Apart from the above mentioned challenges, focus would be on infrastructural development, financial sector reforms, macro-economic stability, better farm policies and employment generation. He plans to handle the issues driven by market forces like market manipulation and to some extent corruption.
Ahluwalia was not happy with the electronic media, which supposedly has portrayed a large difference between the upper and the poverty class. “Both extremes are understandably viewed as newsworthy, but in focusing disproportionately on them, the steady improvement in living standards of the very substantial population in the middle, and the associated rise of a growing middle class, receives much less attention than it should," he says.
He also highlights the impact of inflation on growth of the economy. “A modest rate of inflation is tolerable, and may even be necessary to accommodate relative price changes that have become unavoidable. However, inflation beyond the tolerable level — usually put at 5 to 6 per cent by the government and 4 to 5 per cent by the central bank — is regressive," he says.
Though, he is positive on the fact that the financial sector reforms can benefit the economy, provided they are implemented in a right manner and a right channel.