Kerala State Plan for 2012-13 Finalized

The Annual Plan for the year 2012-13 for the state of Kerala was finalised here today at a meeting between Deputy Chairman, Planning Commission, Mr.Montek Singh Ahluwalia and Chief Minister of Kerala, OommenChandy. The plan size has been agreed at Rs14,010 crore.

In his comments on the plan performance of the State, Mr Ahluwalia said the State has commendable achievements and their expenditure realization is satisfactory. He said performance in education and health sector is better than most of the States. Attention was drawn to the falling growth in the agriculture and it was pointed out that the share of the Agriculture & Industry sectors in Kerala’s GSDP has been gradually falling over the year, whereas the share of Services sector has been rising. The Services sector accounts for 69.7% of the GSDP at 2004-05 prices followed by the Industry sector (20.5%) and the Agriculture sector (9.8%) during 2011-12. The State was advised to take initiatives aimed at reviving interest in agriculture including crop diversification and allied sectors. Need for power tariff revision and unbundling of State Electricity board was also suggested.

The Kerala’s GSDP has increased from Rs. 1,19,264 crore in 2004-05 to Rs. 1,93,383 crore in 2010-11 (at 2004-05 constant prices), with a CAGR of 8.4%. The 11th Five Year Plan of the State had targeted to achieve the growth rate of 9.50% for the economy in terms of the GSDP. However for the first four years of the XI Plan, the GSDP had grown at a CAGR of 8.1% only. The real per capita income of Kerala is higher than the real per capita income of the country as a whole. The real per capita income of Kerala has increased at CAGR of 7.75% during 2004-05 to 2010-11 while the All India per capita income has increased at CAGR of 6.84% during the same period.

Mr Ahluwalia appreciated the efforts aimed at linking planning with targets and introducing a strict system of plan monitoring at all levels. He said the attempt to capture progress of implementation at various levels at all stages would help in substantially improving plan achievements. He also invited suggestions from the State in the formulation of 12th plan. The State was advised to take a lead in water a management by enacting national frame-work law on water.

In his comments, the Minister for Planning Mr Ashwani Kumar said that the State should focus on area specific approach while designing strategy for revival of agriculture and pointed out that the sector could address the problem of unemployment as well as over urbanisation. He said tourism and industry are other areas which can generate employment opportunities and the State should maintain focus on these sectors during the 12th plan period.

The agriculture sector has registered a negative growth rate in the first 4 years of XI Five Year Plan (except in 2008-09). In the first four year of XI Plan, the growth rate in the Industry sector had always been less than the target set for the XI Plan. The CAGR of the sector during 2007-11 was only 5.57% compared to the target of 9.00%. Except for in 2008-09, the Service sector has registered a growth rate in excess of 11.00% during the first four year of XI Five Year Plan.

Mr.Chandy said that in spite of adverse economic climate, the financial policies adopted by the State Government have started showing positive outcomes. Apart from mobilizing adequate resources for development and curtailing wasteful expenditure, the State has spent every rupee towards accelerating State’s development and for the welfare of the people. The fiscal deficit and effective revenue deficit for the year 2011-12 were under control at 3.46% of GSDP and 1.67% of GSDP, as against FRBM target of 3.5% and 1.4%.

On 12th plan, he said focus will be on “Development with Care and Compassion”. The Plan will be people-centric, based on the needs of the citizens and aimed at improving the status of each individual and each group of people. The focus will also be on a bottom – up approach, starting from the people at the lowest strata, to achieve the objective of inclusive growth. The sum total of investment is expected to be far greater than the amount of Government Plan investment, as government will actively promote PPP and project financing through other schemes.

He said the Annual Plan 2012-13 will give the agriculture sector top priority by providing substantial increase in the outlay. Similarly, a major thrust is given to Medical and Public Health, Higher Education, Urban Development, Dairy Development, Sports and Youth services, Tourism and Art & Culture. In respect of public health, there is need for increased spending both by the centre and the states.

Infrastructure development is one of the major thrust areas. State Road Improvement Project, Improvement of Road Maintenance Project and Road safety enhancement are some of the new proposals for infrastructure development.

He said there is substantial increase in the social sector outlays. Education sector, Higher Education in particular, is given much emphasis considering the requirement of improving quality of education. Elevation of Government Schools to International standard, Systematization of pre-primary education, Skill development programme, Centres of excellence in 10 colleges including heritage colleges are some of the new projects proposed for 2012-13.

20 April 2012

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