Key challenges for 12th Plan Initial note

Enhancing capacity for growth

Today, India can sustain a GDP growth of 8 percent a year. Increasing this to 9 or 10 percent will need more mobilization of investment resources; better allocation of these resources through more efficient capital markets; more efficient use of resources through the public system; and, higher investment in infrastructure through both public and Public-Private Partnership routes.

What are the key challenges

Investment and financing Enhancing industrial sector share of GDP Improving agricultural output (examined separately) Subsidies with limited economic rationale Implementation capacity and capability of government Capital market policies focused on short term goals and targets Inequitable market regulations that restrict competition

What should be the key focus areas

Improving efficiency of factors of production to improve competitiveness (improving investment climate through simplification of Government process & compliance)

Moving government from implementation to facilitation role

Sector level financial policies with long term development focus Further liberalization to increase competition and adoption of best practices Examination of subsidy volume, processes and impact Innovative and sustainable PPP and FDI investment models

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Environmental and ecological sustainability

Environmental and ecological degradation has serious global and local implications, especially for the most vulnerable citizens of our country. How can we encourage responsible behavior, without compromising on our developmental needs?

What are the key challenges

Water Skewed pricing Low investment Shortages of sources Land Land constraints Land acquisition and land use change Resettlement and rehabilitation Environment Low carbon growth model Efficient innovation Funding and investments

What should be the key focus areas

Water Introduce pricing mechanism for water Create demand side efficiency mgmt. program Incentives for water conservation ( create a Water Efficiency Bureau like BEE) Land Land mapping based on usage Clarification on forest / costal land policy Implementation of defined & agreed R&R plans & programs. Environment Transparent policy on deployment of clean energy fund Incentives for using cleaner technology options Implementation of PAT (Perform, Achieve & Trade) Innovation in clean energy usage PPP framework for hazardous waste mgmt.
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Enhancing skills and faster generation of employment

It is believed that Indias economic growth is not generating enough jobs or livelihood opportunities. At the same time, many sectors face manpower shortages. To address both, we need to improve our education and training systems; create efficient and accessible labor markets for all skill categories; and encourage the faster growth of small and micro enterprises.

What are the key challenges

Employability of students from technical training institutes Introduction of vocational training from class V in schools Participation from industry Regulated skill development programs Multiple layers of state and central control Migration of skilled labor Lack of recognition (no brand) for vocational training

What should be the key focus areas

Encourage industry to adopt innovative methods to scale up vocational training efforts Development of central organization to assist and regulate all public-private partnerships (NSDC could fulfill) The need to concentrate on capacity building program for Training of Trainers Innovative systems to ensure accessibility for beneficiaries and sustainable economics for training facilities - For eg. distribution of training vouchers along with NAREGA that can be encashed by training institutes Ensure low cost rentable workers housing near industrial hubs Targeting schemes like NAREGA at specific sections of population

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Decentralization, Empowerment, and Information

Greater and more informed participation of all citizens in decision-making, enforcing accountability, exercising their rights and entitlements; and determining the course of their lives is central to faster growth, inclusion, and sustainability. How can we best promote the capabilities of all Indians, especially the most disadvantaged, to achieve this end?

What are the key challenges

Connectivity to villages limited Implementation and execution of National egovernance plan Lack of funding / investments Current issues in Governance

What should be the key focus areas

Technology enablement
- Investment in setting up broadband fiber optics

Track and publish progress on MMPs Action recommendations of the Administrative Services Reforms Commission Investment in education of all on their fundamental right to information, and accountability of Government

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Technology and innovation

Technological and organizational innovation is the key to higher productivity and competitiveness. How can we encourage and incentivize innovation and their diffusion in academia and government as well as in enterprises of all sizes.

What are the key challenges

India, having all the ingredients in place, is way behind others on industrial innovation and technology start-ups those play important role in transforming a nation to Innovation-driven Economy for inclusive and sustainable growth. Indian industry were not driven enough to build their fundamental capacity and mindset for technology & innovation primarily due to supply-driven economy in pre-reforms era. Hence high fiscal incentives could not attract industrys investment in technology & innovation

What should be the key focus areas

Build capacities for industrial innovation and technologystartups through training and services in the areas of R&D, technology transfer, IPR, Design etc. Facilitate enabling ecosystem for industrial innovation and technology start-ups through policy research and recommendations, global networking platforms, reports & publications, recognition & awards and interventions in areas of Industrial innovation, Entrepreneurship & Tech Start-ups, University-Industry collaboration, Global tech partnership, Design and Intellectual Property Rights Facilitate access to financial support for innovation & their deployment in the areas of industrial R&D, technology transfer including mentoring support to technology start-ups

Technology-startups in India did not flourish primarily due to lack of structured support mechanisms and encouragement

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Securing the energy future for India

Faster and more inclusive growth will require a rapid increase in energy consumption. Since we have limited domestic resources, how can we meet this need equitably and affordably without compromising on our environment?

What are the key challenges

Limited domestic resources Delay in execution of energy projects Unaffordable renewable alternatives Global competition to secure energy resources Energy inefficient transportation infrastructure T&D losses in power grids Low investment in clean technologies Environment concerns

What should be the key focus areas

Integrated policy for coal asset development covering R&R, environment and forest issues Acceleration of current energy projects Investment in affordable clean tech Investment in Nuclear power generation Focus on distributed (offgrid) power generation Investment in domestic oil & gas exploration Development of energy efficient infrastructure (rail, ports, roads, gas pipelines & electricity transmission network) Privatization and distribution reforms to reduce T&D losses in power Securing long term contracts for energy imports

Manpower capacity building

Ability to attract finances to fund energy projects (local banks have reached sectoral limits & FIIs are not showing interest)

Development in energy efficiency measures and vehicle mileage norms

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Accelerated development of transport infrastructure

Our inadequate transport infrastructure results in lower efficiency and productivity; higher transaction costs; and insufficient access to our large national market. How can we create an efficient and widespread multi-modal transport network.

What are the key challenges

Inadequate growth of Railway network
- New capacity creation - Improving capacity utilization

What should be the key focus areas

Fast track implementation of Rail Corridor projects monitored by PMO/PC Re-examination of NHAI structure, capability enhancement of organization Implementation of PPP framework for coastal transport and inland waterways Creation of an inter-ministerial body (permanent) for all multimodal project issues Gradual cuts in passenger subsidies more investments in track upgradation and technology

Slow pace of National Highway Development

Poor usage of Inland and coastal waterways Inter-state issues on taxes and duties Absence of integrated planning for logistics hubs

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Rural Transformation and Sustained Growth of Agriculture

Rural India suffers from poor infrastructure and inadequate amenities. Low agricultural growth perpetuates nutritional insecurities, which also reduces rural incomes. How can we encourage and support our villages in improving their living and livelihood conditions in innovative ways?

What are the key challenges

Stagnation in growth and yields Fragmented land holding patterns Poor rural infrastructure Agriculture Extension System has collapsed Low public investment No major technological breakthrough in sight Erratic exports based on availability and pricing

What should be the key focus areas

Provision of quality inputs in right quantity, at the right time, right price Linking agriculture to markets & creating an enabling regulatory environment Encourage private investments in retail & supply chain management Fiscal incentives for private sector investment in agriculture & agri focused infrastructure

Policy for land consolidation for agriculture

Implementation of Goods & Service Tax (GST) Policy for long term agri. export strategy Farm mechanization

Eliminate policy distortions arising out of food security concerns

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Managing Urbanization
Most of our metros and cities are under severe stress with inadequate social and physical infrastructure coupled with worsening pollution. Migration pressures are likely to increase. How do we make our cities more liveable? What can we do today to ensure that smaller cities and towns are not similarly overwhelmed tomorrow?

What are the key challenges

Under investment in urban infrastructure Poor / no city planning Ineffective governance Capacity constraints on water supply, waste management systems and public transport Rising slum population Concerns over environmental sustainability

What should be the key focus areas

Mechanism to ensure cities have reliable access to funds Encourage PPP for urban infrastructure provision, operation and maintenance Systematic and long term urban planning Enforce 74th constitutional amendment to empower cities Expand water supply and waste management systems Develop robust public transportation system Affordable housing schemes for low income groups Undertake urban land reforms
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Improved access to Quality Education

Educational and training facilities have been increasing rapidly. However, access, affordability, and quality remain serious concerns. Employability is also an issue. How can we improve the quality and the utility of our education, while ensuring equity and affordability?

What are the key challenges

Inconsistent data on education Insufficient school infrastructure Lack of teachers and school administrators Inefficiencies in utilization of current resources High ratio of school drop-outs Inconsistency in the quality of education Limited focus on skill development Insufficient collaboration between industry and academia

What should be the key focus areas

Rework ICT policy for education to encourage sustainable private sector investments Mandate technology through PPP model Engage private sector in training teachers and school administrators Accreditation of schools and colleges by independent agency Introduction of vocational training in schools Implementation of national qualification framework Greater participation of industry in college accreditation and curriculum development Collaboration between education and vocational institutes, industry and research
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Better preventive and curative healthcare

Indias health indicators are not improving as fast as other socio-economic indicators. Good healthcare is perceived to be either unavailable or unaffordable. How can we improve healthcare conditions, both curative and preventive, especially relating to women and children?

What are the key challenges

Inadequate physical infrastructure Shortage of physicians, nurses, technicians and administrators

What should be the key focus areas

Expanding healthcare infrastructure Create land banks Developing medical equipment and the pharmaceutical market Re-examination of medical education systems phased deregulation PPP and fiscal incentives for medical infrastructure and manpower development Focus on primary healthcare Increasing insurance penetration and coverage Launching preventive & wellness initiatives

Limited focus on primary healthcare

Low governments healthcare spending Low insurance penetration

Poor quality and dramatic variation across institutions and geographies

Low healthcare and disease awareness Inadequate medical education institutes

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Economic Turbo Chargers

Indias social and economic growth have picked up in the past 15 years. A few critical short term initiatives can have high impact in turbo charging economic growth further and can facilitate other long term initiatives. What are the key initiatives that should be prioritized to give immediate boost to countrys growth?

Turbocharger 1 Integrated waterways program

- Large economic multiplier - Employment generation - Water security - Low cost surface transportation network

Turbocharger 2
Mega city development
- Addressing current urban challenges - Economic multiplier - Support urban migration

Turbocharger 3 Education and Health access for all

- Address current social gaps - Enhance productivity - Ensure minimum quality of life for all

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Key challenges for 12th Plan Initial note

Knowledge Partner:

Bain & Company