Challenges before India in coming years (12th plan)

1. Enhancing Skills and Faster Generation of Employment

Enhancing Skills to Reap Demographic Dividend Skill building can be viewed as an instrument to improve the effectiveness and contribution of labor to the overall production. It is as an important ingredient to push the production possibility frontier outward and to take growth rate of the economy to a higher trajectory. Skill building could also be seen as an instrument to empower the individual and improve his/her social acceptance or value. The contemporary focus on skill building or skill development in India is derived from the changing demographic profiles in India vis--vis China, Western Europe, and North America. These changing demographic profiles indicate that India has a unique 20 to 25 years window of opportunity called demographic dividend. The demographic dividend is essentially due to two factors (a) declining birth rates and (b) improvement in life expectancy. The declining birth rate changes the age distribution and makes for a smaller proportion of population in the dependent ages and for relatively larger share in the productive labor force. The result is low dependency ratio which can provide comparative cost advantage and competitiveness to the economy. The demographic dividend accounts for India having worlds youngest work force with a median age way below that of China and OECD Countries. Alongside this window of opportunity for India, the global economy is expected to witness a skilled man power shortage to the extent of around 56 million by 2020. Thus, the demographic dividend in India needs to be exploited not only to expand the production possibility frontier but also to meet the skilled manpower requirements of in India and abroad. To reap the benefits of demographic dividend, the Eleventh Five Year Plan had favored the creation of a comprehensive National Skill Development Mission. As a result, a Coordinated Action on Skill Development with three-tier institutional structure consisting of (i) PMs National Council (ii) National Skill Development Coordination Board (NSDCB), (iii) National Skill Development Corporation (NSDC) was created in early 2008. Whereas, Prime Ministers National Council on Skill Development has spelt out policy advice, and direction in the form of Core Principles and has given a Vision to create 500 million skilled people by 2022 through skill systems (which must have high degree of inclusivity), NSDCB has taken upon itself the task of coordinating the skill development efforts of a large number of Central Ministries/Departments and States. The NSDC has geared itself for preparing comprehensive action plans and activities which would promote PPP models of financing skill development. The three-tier structure has laid the institutional foundations for a more proactive role of public (Centre plus States) and private and third sector interactions and interfaces for harnessing the benefits of demographic dividend. It has also been able to focus on skill development through the creation of a coordinating mechanism. It has also made the issue of skill development as an important agenda for the Governments at Centre as well as States. It has articulated the importance of State Governments in the delivery of skill development. In this regard, various challenges on skill development that merit attention in the remaining years of the current Plan and the Twelfth Five Year Plan are presented below: 1) Governments preoccupation with providing and financing training has led to overlook its role in one key areadisseminating information about the availability and effectiveness of training programs. An important role that the Employment Exchanges, NCVT and the SCVTs could play is dissemination of information on the nature and quality of training particularly with respect to enrollment, institutional capacity, completion information and graduate follow-up data from all registered vocational institutions. This will enable the government and the stakeholders to see whether the system is responding to employers needs and devise policies accordingly. 2) Whilst industry associations and individual employers are beginning to show interest involving themselves in the development and management of the ITIs, their involvement in the vocational training system is still at a nascent stage. Involvement of employers in management will see a major spurt only if the governments is willing to provide institutions greater autonomy. However, increased autonomy needs to be accompanied by greater accountability and performance must be measured on the basis of internal/external efficiency indicators. 3) The management of the Vocational Education and Training System is fragmented and shared between various institutions, especially the NCVT, DGET and the SCVTs. There is a lot of scope to improve coordination between them and improve their effectiveness through more functional partnerships. 4) There is a need to identify institutions to carry out impact evaluation studies/ tracer studies/ surveys of graduates from vocational institutes on a regular basis. 5) Since funding is largely restricted to publicly provided training, little attention is paid to financing as an innovative means to encourage good quality public / private / in-service training. Once an institution begins to receive funding, subsequent funds are assured regardless of the institutions performance. Student fees in ITIs/polytechnics go to the State treasuries and hence, the training providers have very little financial incentive to improve efficiency and cater to the market requirements. Therefore, there is a need to re look at the funding of skill development activities.

6) Vocational training institutes should be given greater freedom in terms of resource generation (sale of production or service activities, consultancy) and in utilizing the proceeds for not only cost recovery but also incentivizing those who generate revenues. Developing Efficient and Fair Labor Markets for All Categories of Workers. In 2004-05, the total employment in the country was estimated at 459.1 million out of which 56.8 percent of workforce belonged to self employment, 28.9 percent to casual labor, and 14.3 percent to regular wages. About 8 percent of the total work force in India is employed in the organized sector, while the remaining 92 percent are in the non-formal sector. Employment needs to be generated in all the sectors, namely primary, secondary, and territory. The quality of employment in organized sector is generally high though the scope of additional employment generation in this sector is rather limited. Significant employment generation is taking place in tertiary sector, particularly, in services industries. Self-employment and small business continue to play a vital role in this regard. It is, therefore, necessary to promote main employment generation activities like (a) agriculture, (b) labor intensive manufacturing sector such as food processing, leather products, textiles (c) services sectors: trade, restaurants and hotels, tourism, construction and information technology and (d) small and medium enterprises. To develop efficient and fair labor markets for workers belonging to both organized and unorganized sector, the following areas require attention: 1) While flexibility (in term of size and type of workforce, duration of work and location of workplace) is required by employers to adjust to the changing market conditions, the workers need to be provided with basic security (in term of statutory compensation in the event of closure or retrenchment or layoff, unemployment allowance, retraining and redeployment facilities, access to social security).This may require amendments to Industrial Disputes Act, 1947 and Contract Labor (Regulation and Abolition) Act, 1970 and strengthening of social security schemes for both organized (like Rajiv Gandhi Shramik Kalyan Yojana, facilities being provided by ESIC and EPFO etc.) and Unorganized (like Rashtriya Swasthya Bima Yojna, Aam Admi Bima Yojana, Indira Gandhi National Old Age Pension Scheme, newly announced Swabalamban Pension Scheme etc.) sector workers. 2) Conditions of service for contract /casual workers need to improve. 3) Better enforcement of Labor Laws and Regulations and strengthening of the competencies of the labor administration. 4) Simplification and rationalization of labor laws without compromising the interest of workers. 5) Observance of core labor standards. In the context of mitigating adverse impact of global economic slowdown, ILO has evolved Global Job Pact placing employment protection and creation at the heart of revival strategy through stimulus packages etc., which needs to be examined. Improving Financial and Regulatory Ecosystem for the Growth of Enterprises. A vibrant manufacturing, especially, Small and Medium Enterprises sector can play a key role in creating jobs and high economic growth. It has the potential to provide employment for the exceptionally large labor force that is still working in agriculture. Achieving and sustaining such growth and higher employment will require a boost in industrial and services growth, spurred by SMEs. Several factors constrain the growth and competitiveness of Indian SMEs. Lack of access to adequate and timely financing is especially critical. Without it, borrowing becomes more expensive and profit margins are reduced, holding back the establishment of new units and the consequent increase in job creation. The financing constraints can be attributed to a combination of factors that include policy, legal and regulatory framework (bankruptcy and contract enforcement), institutional weaknesses (absence of good credit appraisal), and lack of reliable credit information on SMEs. It is, therefore, essential that regulations be made stable, predictable, and promote competition and investment. Excessive regulation can have the unintended effect of discouraging employment. Sustainable Livelihoods for Alleviation of Poverty This is the essence of inclusive growth requiring strong boost to various employment promotion schemes for those workers who are at the bottom of the pyramid such as: 1) Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which provides a legal guarantee of at least 100 days of wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work.

2) Swarnjayanti Gram Swarozgar Yojana covering all aspects of self-employment such as organization of rural poor into Self Help Group (SHG) and their capacity building, training, planning of activities clusters, infrastructure development, financial assistance through bank credit, subsidy, market support, etc. The SGSY has been implemented in all states except Delhi and Chandigarh since 1999. It was primarily designed to promote self-employment oriented income generating activities for below poverty line households in the rural areas. The scheme has been restructured as a National Rural Livelihood Mission (NRLM) which will function in a mission mode for target-based delivery of outcomes and follow a demand driven approach. The mission aims at reducing poverty through promotion of diversified and gainful self-employment and skilled wage employment opportunities to increase income of the rural poor on a sustainable basis. The mission will broadly adopt objectives such as universal social mobilization, formation of people's institutions, universal financial Inclusion, training and capacity building, enhanced package of economic assistance for setting up of micro enterprises and larger role for Self Help Groups (SHGs) level. 3) Swarn Jayanti Shahri Rozgar Yojana providing gainful employment to this urban poor. A national Urban Employment Guarantee Scheme can be contemplated. Innovative schemes to promote skill development like Skill Development Initiative (SDI), Kaushal Vikas Yojana (KVY) for setting up Industrial Training Institutes and Skill Development Centers in uncovered areas and skill development plan for districts affected by Left Wing Extremism, would help. 2. Managing the Environment The Planning Commission has identified twelve Strategy Challenges for the 12th Plan Approach Paper. Managing the Environment and Ecology with the following five components is one of the Challenges: . Land, mining, and Forest Rights . Mitigation and Adaptation Strategy for Climate Change . Waste management and Pollution Abatement . Degradation of forests and loss of biodiversity . Issues of Environment Sustainability Expectations The general expectations of the citizens with respect to environment are: Access to clean air, water, and soil; Right to Natural resources; Sustainable Livelihoods and healthy surroundings. Suggestions Detailed below are some suggestions in respect of, Policy, legislation, both national and international, institutional mechanisms, infrastructure, and Science and technology in the management of Environment and Ecology and specific suggestions with respect to the five components. a) Institutionalize a holistic, integrated approach for the management of environment and natural resources, converging national regulations and international protocols in relevant sectoral and cross-sectoral policies, through review and consultation. b) Evolve schemes to encourage trading in air and water pollutants in industrial complexes. Establish on-line continuous monitoring systems to enable trading of pollutants and encourage public and private sector participation in GHG emission trading. c) Identify emerging areas for new legislation, including our obligations under multilateral environmental regimes and review the body of existing legislation. d) Ensure accountability of the concerned levels of Government (Centre, State, Local) in implementing existing legislation and introducing necessary legislation, wherever required in a defined time-frame, ensuring the livelihoods and well-being of the poor and improved access to the necessary environmental resources.

e) Promote research and the use of information technology based tools, together with necessary capacity-building. Bring about transparency through public web-portal for national resource accounting for Non Wood Forest Produce ( NWFP) , common property resources, usufruct rights etc on GIS platform. f) Encourage Industrial Associations to shoulder greater responsibility of environmental management, implementation of regulation, including drafting strategy on issues on environment and trade that affect industry. g) Develop multiple models, for rapid and effective restoration, of open and degraded forests, wastelands and urban areas through PPP and community participation. h) Introduce Performance monitoring and development of Environment performance linked financial devolution mechanisms to states. i) Setup regional databases on natural resources to support the information requirements of planning and prepare inventory through land cover mapping (Remote Sensing, 1;4000 scale ). j) Review the list of International Conventions to which India is a signatory and party to fix a timeframe to ratify and fulfill obligations under these Conventions. k) Put in place rules and guidelines in the Area of Access and Benefit sharing, trade especially exports in LMOs and GMOs in respect of Biological Resources. l) 12th plan should focus on leadership role for India in SAARC, ASEAN, and SACEP, including serving as repository of information and help train in early warning systems for disasters. A Strategy and action plan should be drawn up to forge partnership among countries in the region. m) TIFAC be commissioned to list 10 cutting edge technologies for possible exhaustive studies and field trials in environment sector. n) Strengthen Scientific Research, Technology Development and Human Resource in areas of environment and ecology which are critical for Sustainable Development Specific Suggestions 1. Land, Mining and Forests Rights 1.1 The key suggestions identified for effective land management include the following: a) Land development/diversion for various uses, be based on a national policy. b) A national strategy based on scientific understanding of the natural resources both above and below ground, resettlement and livelihood requirements is necessary, c) Existing policy, in respect of Energy, Raw materials etc., to indicate the various source options taking into consideration availability, cost and environmental impact, be modified. d) Conduct Cumulative Environmental Impact Assessments (EIAs) for vulnerable regions and Carrying capacity studies in selected river-basins, and e) Adapt remediation techniques developed elsewhere for de-contamination of contaminated sites. 1.2 The key issues identified in respect of mining include the following;a) Effective land management to restore degraded lands. b) Promote, more efficient metals recycling industry by adopting modern technology, c) Formulate, a sustainable Development Framework which addresses issues related to economic viability, environmental impact and social concerns, and d) Take action to check illegal mining activities 1.3 Forests Rights The livelihood rights of forest-based communities need to be respected in conservation efforts, even as new livelihood and revenue options are explored. Following are some key issues:a) Current schemes of compensation needs to be reviewed, and b) Payments for Environmental Services (PES) schemes needs to be introduced and proposals developed to prevent poaching of flagship species like tiger, rhino, elephants, etc; to check fragmentation and degradation of wildlife habitats and corridors; to reduce instances of humanwildlife conflict; to control illegal trade in wildlife products; Creation of inviolate areas for tiger and other flagship species, and; Voluntary relocation of people from core areas. In PES schemes, locals be paid to conserve and manage resources. 2. Mitigation and Adaption Strategy for Climate change

1. The two key challenges that have to be addressed by various stakeholders in the short term on Climate Change are: a) Ensuring, involvement of various stakeholders, including the State Governments, in implementing the National Action Plan for Climate Change (NAPCC), and b) Achieve a low-emission sustainable development growth model using a voluntary approach. 2. The strategy/ guidelines of NDMA be modified to draw up regional disaster preparedness and mitigation plans, which should also address pre and post disasters migrations. 3. States need to prepare the State Level Action Plan for Climate Change (SAPCC) within a time frame, which can be dovetailed with the NAPCC. 4. The eight National Missions documents needs to be finalized, adopted, and actions initiated. 5. Waste Management and Pollution Abatement Waste Management 1. Encourage 4 Rs (Recycle, Reuse, Reduce and Re-manufacture) and co-processing of HW for recovery of energy 2. Incentivize public-private partnership for creating the required infrastructure for Setting up of Treatment Storage and Disposal Facilities (TSDF) for hazardous waste management across the country. 3. Ensure Segregation of Bio-medical wastes as per existing rules and the infectious and hazardous wastes treated in dedicated facilities. Common facilities be setup. 4. Enhance recycling facilities for E-wastes in the country. 5. Ensure Municipal Solid Waste segregation, collection and setting up of facilities for complete disposal. Where ever possible recycling and processing has to be ensured during the 12th Plan to protect our people and the environment 6. Green belt for dust and Noise abatement and odour mitigation is considered essential. Water environment The key challenges for maintaining acceptable water quality and quantity across the country are:-Water Pollution and overuse; Indiscriminate use of Wetland/lakes, Agricultural run-offs as residual fertilizer, pesticides and feedlot wastes. Following are suggested: 1. Improve coverage and efficiency of sewage treatment systems, encourage use of low-cost decentralized measures for treatment of wastewater e.g use of microbes for sewage treatment in open drains. 2. Clean critical rivers state wise and all polluted rivers in the country by 2020. 3. No Net loss (NNL) of wetlands acres be set as the goal and a system of permits be introduced to provide replacement wetlands. 4. A National Action Plan to remediate contaminated sites be drawn up. 5. Massive Plantation drives, including other methods for recharging ground water levels be propagated. 4. Degradation of Forests and loss of bio-diversity. Forests 1. The target should be to increase Forest and Tree cover (FTC) by 5%. 2. Encourage efficient use of forest products and alternative sources of fuel, fodder, and timber. 3. Provide Legal backing for JFMCs. 4. Evolve a comprehensive national policy for non-destructive extraction and marketing of both timber and MFP. 5. Organize markets, Build infrastructure, Capacity and upgrade skill for carrying out trade in MFP.

6. Prepare Master greening plans/Roadmaps for all cities with over 1 million populations. Biodiversity and wildlife 1. The major challenges of the sectors include: 1. Preventing poaching of flagship species like tiger, rhino, elephants, etc.; 2. check fragmentation and degradation of wildlife habitats and corridors; 3. reduce instances of humanwildlife conflict; 4. control illegal trade in wildlife products; 5. Creation of inviolate areas for tiger and other flagship species, and; 6. Voluntary relocation of people from core areas. 2. Draft a national action plan on the management of biological invasion., and 3. Create proper institutional mechanisms for involving local stakeholders, including local communities, in coastal and mangrove restoration and conservation programs. 5. Monitorable targets for the 12th Plan 1. To increase forest and tree cover by 5 percentage points. 2. To reclaim wetlands/inland lakes /ponds (of ------ Ha) by 2017 3. To identify, assess and remediate contaminated sites (hazardous chemicals and wastes) with potential for ground water contamination. 4. To improve forest production and maintain biodiversity. 5. To establish continuous on-line monitoring systems using GIS & GPS for air and water pollution. 6. To create Common Infrastructure for Environment Protection viz; CETP, TSDF etc. 7. To clean all critically polluted rivers by 2020. 8. To reduce 20-25 percent energy use per unit of GDP by 2020. 9. Epidemiological studies to assess improvement in health status due to better management of Environment and ecology. 3. Markets for Efficiency and Inclusion Open, integrated, and well-regulated markets for land, labor, and capital and for goods and services are essential for growth, inclusion, and sustainability. We have many sectors were markets are non-existent or incomplete, especially those which are dominated by public provisioning. How do we create or improve markets in all sectors? 4. Decentralisation, 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? 5. Technology and Innovation Science has played a key role in enhancing the growth and development of society and generating access to new and improved goods and services. Science underpins most breakthrough initiatives, but beyond the domain of science, innovations play a critical role in enhancing delivery of services and enabling access to improved goods. In view of this, India needs to stimulate and strengthen its entire eco-systemthe formal scientific and industrial system, as well as the innovation eco-systemto develop solutions for the country.s agenda of faster, sustainable and more inclusive growth. Innovation can fulfill needs, which are not met by conventional means and this is critical in view of the numerous challenges the country is facing in delivering services to the people, especially at the bottom of the pyramid. In this context India needs more frugal, distributed, affordable innovation that produces more frugal cost products and services that are affordable by people at low levels of incomes without compromising the safety, efficiency, and utility of the products. The country also needs innovation processes that are frugal. in terms of resources required and these products and services must also have a frugal impact on the earth.s resources and must be designed to be environmentally sustainable. Innovations in India hence need to cast a wider net to benefit more and more people who are currently marginalized by the system.

A holistic view of the science, technology, and innovation eco-system can ensure best points for intervention in the system. Stimulating this eco-system requires enablers in the form of policies, strategies, novel ideas, and catalysts to effectively meet the challenges in the system. Below are some strategy challenges that need to be addressed for strengthening the eco-system and the proposed approaches for the way forward: Enrichment of Knowledge base Basic research in India has generally followed global models during the last three decades. Indian systems for supporting basic research has so far not adopted adequate measures for promoting joint research with active schools in the global scene in frontier areas of science. The challenge however is how to spot, attract, nurture, and encourage sparks and talent in scientific research and identify areas of national interest and gaps for promotion of basic research and improving the quality of science education. Incentivizing R&D in Public and Private Sector A strong R&D sector is important not only for competitive growth but more importantly for addressing key strategic issues. While public funded institutions are generating technology leads, their levels of utilization by commercial enterprises have been limited. The present models of research funding in the country do not facilitate the funding of projects in the private sector, whereas several global models do so. Current fiscal incentives for attraction of investments into R&D by way of tax benefits have led only to marginal results and the linkages between academiaresearch and industry remain under developed and weak. The challenge is how to create a vibrant landscape of Public-Private Partnership and an enabling framework for attracting investment from the industrial sector into R&D system and incentivize the same for linking development with deployment in the innovation and technology sector. Improving Governance in S&T Institutions: Optimum utilization of appropriate institutional framework created to enhance India.s R&D capability need to undergo critical review to ensure that the much needed resources, both financial and human, are deployed in an optimal fashion. It is critical to analyze how to leverage the industrial infrastructure and create appropriate institutional framework and organizational mechanisms cutting across departments to derive maximum benefits of the investments. The challenge therefore is to bring in radical but participative transformation, which is multifaceted and multidirectional for structural changes in rebuilding and transforming existing institutions. University, industry, and Scientific Establishment Collaboration: India has the third largest education system in the world. A conducive research sector requires cutting edge research universities, industrial R&D Centre.s and a network of Government Laboratories with well-maintained infrastructure and liberal funding, working together towards defined objectives. Further, effective mechanisms of collaboration need to be created for universities and industry bodies so that research output and innovations can effectively be commercialized and transformed into marketable products and services for last mile benefits. A cluster-based approach to spur innovations at universities could be adopted wherein a minimum critical mass of universities is identified and efforts are made to create or strengthen the innovation eco-system around them. The innovation universities could also provide a platform for experimenting with new models of universities where the above mentioned integration could be realized. Promoting Collaborations through Clusters Collaborations can play a crucial role in stimulating innovations and fostering knowledge transfers which would foster interconnections that link intellectual, financial, human, and creative capital as well as unleash underutilized capital. Such enterprises could take the shape of physical or virtual clusters, which bring together research, business, risk capital, and creativity to turn ideas into products, processes, and services. In the Open Innovation Model, by using an open source and collaborative approach, organizations could expect to develop affordable products for the world which otherwise would not be a cost effective option for many organizations. Many clusters and collaborative initiatives to foster innovation have begun to operate in the country. These include SIENthe Science and Entrepreneurship initiative hosted in IIT Powai; an automotive cluster in Pune; an initiative at the CMTI with involvement of ISRO to develop technologies for flexible manufacturing, and many others. Government needs to take appropriate steps to promote the growth of such collaborative initiatives, both in the physical and virtual domains. The National Innovation Council (NInC) is in the process of facilitating the setting up of industry and university based clusters to spur innovations. Supportive Financial System

Innovation requires a financial system which is supportive and inclusive and which provides the necessary risk capital to spur innovations and enterprises. Venture Funds are recognized globally as the most suitable form of providing risk capital for the growth of innovative technology and breakthrough ideas. While India is amongst the top recipients in Asia for Venture Funds and Private Equity Funds so far, these investments need to be focused on small early stage start-ups and not only into relatively large and safer. investments. To have a greater impact existing funding options, especially made available by the Government need to be increased. India.s dependency on foreign VC/PE funds and almost no domestic venture capital needs to be addressed. Despite the growth in the VC industry in India and the complementary increase in government schemes, the seed funding stage continues to be severely hampered. Also, it is especially crucial to provide funding for stimulating innovations that will produce socially useful outcomes for poorer people and enterprises which are focused on delivering this. In light of this, the Indian innovation eco-system requires early stage funds acting as angel investors. A dedicated fund, seeded by the Government, and targeted at promoting innovative initiatives that focus on inclusive growth could play a crucial role. The advantage of such a model will be patient capital investments coupled with professional mentoring and management. Platform for Best Practices and Innovations: Currently, there are many enterprises across the country which are delivering benefits to citizens and meeting the challenges of inclusion in areas such as health, education energy, low-cost housing, sanitation, and more through innovative solutions. Often these go beyond the formal confines of R&D labs to include innovations in public service delivery or organisational innovations in local communities aimed at inclusion. However, there is no aggregated platform or single repository to collate and disseminate these best practices and ideas. Also, while some such innovations manage to garner attention on a national scale, most of these workable solutions remain confined to their local contexts and don.t achieve economies of scale because of the lack of a single platform for sharing these best practices among multiple stakeholders. Strengthening the innovation eco-system requires a platform for information sharing and dissemination to ensure: (1) improved access to knowledge and (2) Support in the form of resources, linkages, mentoring and outreach. Greater knowledge of innovations can stimulate their adoptions and adaptations on a large scale This decentralized, open, and networked model would enable information sharing on innovations and collaboration among stakeholders on an unprecedented scale. Improving the Flow of Technology India is in a unique position to mount a strong initiative for affordable innovations for technologies for social and public good by taking advantages of a) low expertise costs, b) vast talent base and c) the residual idealism in the society. However, engagement of multiple stakeholders and creating Public-Private-Partnership for promoting people-centric research is a challenge to address national goals with specific targets in a time bound manner. While technologies for public, strategic, and social goods would require collaborative excellence, competitive excellence models for private good would come from industrial sector, as is the case in most developed countries. Food security of India is closely related to development of technologies for increasing the agriculture outputs through process innovations for land saving and water use. The question is how to develop and deploy new agro biotechnology tools and precision agriculture for increasing the output of agriculture sector in the country by synergizing the strengths of institutions both under public and private sector and adopting a new approach for agriculture research and extension. To achieve optimal health for its people, India has unique challenges due to its large population, demographic transition and vulnerability to all epidemics. Biomedical devices and instrumentation forms an area of serious gap in the country. Breakthrough innovations, with appropriate stress on translational research for affordable health care, are the need of the hour and would call for new models and mechanisms for evaluating technologies for improving healthcare at individual and public health level, fostering academia-industry linkage; and linking technology developers with industry for translation of lead products and processes. Water challenge is a major national issue in the country both in terms of quality and availability. Sustainability of research led solutions depends on interface of technology with policy and societal behavior. Water related technologies form an ideal theme for building state-centre partnerships. The challenge therefore is to convert research outputs from the laboratories into revenue models based solutions in a coordinated manner among the relevant departments in both states and centre for innovative deployment under real field conditions. India is critically dependent upon import of energy supply sources. Energy security demands integrated approaches and planning. Decoupling energy demand from GDP growth is also essential for complying with responsibilities

towards National Action Plan on Climate Change. Therefore, the challenge is to increase the share of clean energy options in the total energy basket of India. MSME sector in India, which is a strong pillar of economic growth is characterized by low technology levels with some exceptions. This acts as a major handicap in the growth of MSME sector in the emerging global market and is therefore, seen as the next frontier for infusion of technology, by increasing penetration in the MSMEs. It is thus a challenge as to how the MSMEs embrace the new technologies to leap frog and contribute significantly in the inclusive growth process. Intellectual Property Rights Intellectual property rights (IPR) have become extremely important in the new knowledge economy due to global competition, high innovation risks, short product cycle, need for rapid changes in technology, high investments in research and development (R&D), production and marketing and need for highly skilled human resources. Relative ranking of India as source of IPR has improved considerably over the years. While the focus should be on global leadership in S&T both at organizational and individual levels, we also need to follow Open Source Innovation Policy and promote IP acquisition by the government for non-exclusive licensing for public and social good sectors of research and development to achieve the objective of faster, sustainable and more inclusive growth and ensure that benefits must reach the poorer people thus utilizing India.s advantageous place to leverage not only its economic strength but also its Scientific and Technological capability by employing desired policy intervention and providing necessary resources. The country thus has to emerge as a technology driven super economic power in globalized knowledge economy. Use of GIS for Development Geographical Information System (GIS) has assumed a critical role in the planning process and is the key to better decision-making. GIS needs to be implemented in seamless manner to cover the whole nation and must reach where it is required along with continuous updating. An institutional mechanism for GIS at the national level will be able to serve this purpose. 6. Securing the Energy Future for India Adequate availability of energy is one of the basic requirements for faster economic growth.To make growth truly inclusive, access to energy in rural areas and to urban poor has to be ensured. Ensuring certain minimum level of energy consumption for everyone is a critical requirement for providing basic amenities required by everyone. The overall availability of energy would need to be increased substantially to meet these twin objectives and to enable a sharp reduction in energy demand and supply gap. It implies that the pace of addition of power generation capacities would need to be stepped up. The addition of new capacities in earlier Plans has been quite inadequate. The position will improve in 11th Plan.These initiatives will need further support with substantially large investments from the private sector. Specific measures to incentivize them to step up the pace of investment and provide competition in the power sector will need to be taken up. Development of energy markets will be promoted as part of this overall policy to help this process. This will ultimately lead to greater competition and better prices for consumers. With limited fuel resources, development of energy-efficient supercritical thermal capacities would be given a very high priority. The Plan will aim to develop at least half the thermal capacity through such energy efficient measures. Simultaneously, policies on setting up new nuclear power capacities and development of fast breeder reactor technologies would be continued. Increased pace of power capacities addition will be unsustainable without a simultaneous thrust on reforms in the power distribution sector. In spite of extensive discussions, emphasis in various fora and conferences and assertions by all stakeholders for undertaking measures for improving distribution efficiency, the T&D losses continue to be unacceptably high. Governance in the power sector, particularly in the distribution network of the utilities, has been quite poor. The regulatory structure in the States has not enabled any significant improvement in the functioning of the utilities. Revision of tariff is not taking place regularly and financial losses of distribution utilities are mounting. The problem of governance deficit in the power sector would be addressed in the Plan with specific policy and statutory measures. Reforms would be taken on a very extensive scale to promote private investments in transmission and generation. Some of the basic requirements of the distribution utilities like universal metering and energy audit would be addressed through this. Large addition to power capacities and higher growth rate of the economy would require substantial increase in availability of energy fuelscoal, gas, and uranium. To develop domestic production of coal, which is the primary source, while taking care of the environmental concerns, policies will be developed for exploitation of substantially large number of coal deposits. Development of underground mines will be especially supported. Availability of domestic coal will need to be supplemented with increased imports to meet the domestic market demand. Necessary infrastructure for improving rail-road connectivity and coal jetties at port will be expanded and a policy evolved for effective and timely

imports. This will include development of long-term contracts. For meeting the requirements of the transport and other sectors, development of other domestic energy sources will be taken up through further exploration of oil and gas with the help of international competitive bidding. Exploration policies will be further refined to attract the major global oil players, international investors and technologies. Shale gas would be explored to ensure larger availability of gas. International cooperation and expertise would aim at quick exploration of all basins for this form of natural gas. India is becoming a major oil importer and will soon become the third largest importer of oil next to USA and China. Technology innovations to improve efficiency of fuel use by automobiles, developing Mass Rapid Transport Systems for moving passenger traffic and also shifting goods transport from road to rail would result in large savings of oil and reduce import dependence. The 12th Plan should aim at developing an efficient public and freight transport system. Major investments to get access to fuel sources located in other energy resource-rich countries will be taken up as an integral measure of overall government economic policy to strengthen energy security. This will cover coal, oil, gas reserves and uranium. Both public and private investors will be encouraged to acquire such assets and develop supply sources in different parts of the world to augment domestic availability. International gas resources from liquefied natural gas (LNG) and through pipelines would supplement the energy requirements and be negotiated. The current LNG infrastructure would be further developed to access this. Domestic gas pipeline network will be expanded and a national gas grid developed. The present policy of promoting investments in private sector in refineries and pipelines for transporting both oil and gas would continue. The overall oil pipeline network for availability of high quality transport fuels will be augmented as new refinery capacities come up and this will help provide a good export potential and LPG for cooking and availability of quality fuels for transport. Universal access to power for lighting and cooking energy is a basic requirement of all civilised societies. There are large gaps in the rural infrastructure of these energy sources. In spite of electrification of a large number of villages, a very significant number of habitations continue to remain uncovered with grid network. Even where electrification has been extended, large number of families has not availed of such connections. Some of them do not have enough resources to get access to power. They need financial support to Universal access to power for lighting and cooking energy is a basic requirement of all civilised societies. There are large gaps in the rural infrastructure of these energy sources. In spite of electrification of a large number of villages, a very significant number of habitations continue to remain uncovered with grid network. Even where electrification has been extended, large number of families has not availed of such connections. Some of them do not have enough resources to get access to power. They need financial support to get this access and continue with it. Similarly, large segments of rural population have no access to energy sources for cooking through LPG. They are dependant primarily on biomass. Cooking from this biomass has enormous harmful effects, particularly for the health of women. The Plan would hence aim at supporting and developing rural marketing network for LPG to provide a minimum access to all families. The Plan would also aim to develop modern research through international network for improving cook-stove, which can use biomass for cooking and have least harmful effects and are environment-friendly. Fuel subsidies are unsustainable for long periods. Given the large step-up in fuel needs, pricing of coal and other fuel sources would move towards market-based pricing. Accordingly, price of oil products, coal, gas and other energy sources will gradually converge towards international market price. While support to below poverty line families would be provided through a regime of direct subsidy, the overall pricing structure would be market-based.

7. Accelerated Development of Transport Infrastructure An efficient, reliable, and safe transport system is vital for fostering rapid economic growth. Over the decades, in spite of significant development of transport modes, transport capacity has tended to lag behind the requirement of economy leading to congestion, asset deterioration and high level of energy consumption, pollution and accidents. Rural areas have inadequate connectivity and there is a continuous increase in the share of road traffic at the expense of rail. Though successive Five Year Plans took cognizance of these problems, there is inadequate investment in capacity building mainly because of resource problem facing the public sector that has been largely responsible for transport infrastructure development. The problem was exacerbated by increasing concentration of economic activity and human settlements in certain areas by relative under-pricing of hydrocarbon fuels and transport services. In spite of special attention being paid, particularly in the recent years, for development of transport infrastructure, some areas like North-East continue to be inadequately served and this has affected not only their economic development but even social and political integration with the rest of the country. In the recent years, economic liberalization has quickened the impulses of economic growth. A rapidly-growing middle class needs of domestic and international trade, large-scale mobility of working population to longer distances and growing demographic pressure have fuelled further demand for transport. The new economic policies have opened new avenues for private participation in transport, thus, augmenting resources as also increasing the scope of commercial orientation to transport operations. At the same time, this development may lead to greater

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concentration of industrial location around existing growth centres and encourage an untrammeled growth of certain modes of transport with regard to their social cost. The major objective in the 12th Plan would be to augment the capacity of various modes of transport and set up an infrastructure comparable with best in the world. The completion of construction of both Eastern and Western Freight Corridors would be expedited. The investment strategy would aim at also developing capacity of high density rail corridors. The augmentation of rail capacity is of utmost urgency as the Railways is the backbone of our transport infrastructure. High speed rail network will be developed. The network itself would be further expanded to more areas. In roads, apart from completing the various phases of NHDP which are in progress, substantial progress would be made in development of expressway network to increase the mobility. Standards of maintenance of National Highways would be further strengthened and a network of six-lane roads augmented and significantly increased. The Pradhan Mantri Gram Sadak Yojana (PMGSY), which aims at improving the accessibility need to be given higher priority. All the habitations identified under the program would be linked with all-weather roads. Efforts would be made to provide accessibility to all the habitations in the rural areas of the country during the Plan period. The programs for development of road infrastructure in the North-East and Naxalite affected areas taken up during the 11th Plan would be completed which would considerably improve the accessibility to these areas leading to their economic development and social and political integration with the rest of the country. The progress towards development of Port sector has been slow in the recent past. Procedures and processes which hamper the development of port sector would be streamlined so that flow of private investment in this sector is increased and able to take care of expanding capacity and modernization needs. Selected deepening of Ports to match with emerging ship technologies would be taken up. Modernization of Airports has been progressing satisfactorily. Further, technological upgradation is, however, needed in traffic control system. With the increase in traffic, the development of non-Metro Airports would be taken up at accelerated pace through private sector participation. The augmentation of capacity in the various sectors would require huge investment. While Public sector would continue to play important role in building transport infrastructure, it is necessary to involve private sector more aggressively. This will help meet investment deficit gap in the Infrastructure sector, improve efficiencies and provide competition to Public sector players which will in turn lead to better quality of service. In sectors like Railways, although the past attempts to raise resources through private sector participation did not pay any dividend yet it is this very option that seems to be one of the most promising courses of action. The resources for the sector as a whole also need to be increased by improving self financing capacity through appropriate policy relating to pricing and user charges. While developing capacities of various modes of transport, the focus would be on modernization and technological upgradation. This would be strongly supported by investments in maintenance of assets to ensure their reliability and continued efficiency. Substantial augmentation of capacity, large-scale investment and higher levels of efficiency in Transport sector require changes in the present organization structure of each transport mode. The process of corporatization of Ports, restructuring of NHAI and setting up a separate organization for development of expressway in the country need to be expedited. Organization structures and mechanisms for ensuring rapid large-scale investment in Railways would be required. In addition, a suitable mechanism for tariff setting in Indian Railways needs to be devised. Transport is one of the major producers of green-house gases emission. It is necessary to encourage the modes of transport technology which consumes less energy per unit of throughput and generate lower level of emissions. Transport policies would be accordingly evolved to support this shift. A roadmap will be developed for this purpose. The situation with regard to transport safety, particularly, that of road transport has not been satisfactory. The increase in accessibility and mobility has further intensified the need to positively effect the safety of transport operations. While developing/modernizing our transport infrastructure, it would be necessary to pay special attention to the safety of transport operations. 8. Rural Transformation and Sustained Growth of Agriculture Rural India suffers from poor infrastructure and inadequate amenities. Low agricultural growth perpetuates food and 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? 9. Managing Urbanization Urbanization in India is expected to accelerate Urbanization in India has occurred more slowly than in other developing countries and the proportion of the population in urban areas has been only 28 per cent based on the 2001 census. The pace of urbanization is now set

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to accelerate as the country sets to a more rapid growth. Economic reform has already unleashed investment and growth offering its citizens rich opportunities. Surging growth and employment in cities will prove a powerful magnet. 300 million Indians currently live in towns and cities. Within 20-25 years, another 300 million people will get added to Indian towns and cities. This urban expansion will happen at a speed quite unlike anything that India has seen before. It took nearly forty years for Indias urban population to rise by 230 million. It could take only half the time to add the next 250 million. If not well managed, this inevitable increase in Indias urban population will place enormous stress on the system. India has not paid systematic attention to urbanization so far. The speed of urbanization poses an unprecedented managerial and policy challengeyet India has not engaged in a national discussion about how to handle the seismic shift in the makeup of the nation. Urban India today is distributed in shapewith a diverse range of large and small cities spread widely around the nation. India will probably continue on a path of distributed model of urbanization because this suits its federal structure and helps to ensure that migration flows arent unbalanced toward any particular city or cities. As the urban population and incomes increase, demand for every key service such as water, transportation, sewage treatment, low income housing will increase five- to sevenfold in cities of every size and type. And if India continues on its current path, urban infrastructure will fall woefully short of what is necessary to sustain prosperous cities. Recent reports suggest that India spends $17 per capita per year in urban infrastructure, whereas the most benchmarks suggest a requirement $100. The investment required for building urban infrastructure in India, over the next 20 years, is estimated at approximately US$ 1 trillion. There has been an incomplete devolution of functions to the elected bodies as per 74th Constitutional Amendment Act, possibly because of the unwillingness of the state governments. In addition, very few Indian cities have 2030 master plans that take into account peak transportation loads, requirements for low-income affordable housing and climate change. In general, the capacity to execute the urban reforms and projects at the municipal and state level has been historically inadequate. Way forward India needs to work on several areas to manage its urbanization: The following are perhaps the most important: Inclusive cities, urban governance, funding, planning, capacity building and low-income housing India also needs to start a political process where the urban issues are debated with evolution of meaningful solutions. The subcommittee of the NDC that has been recently constituted under the chairmanship of the Minister Urban Development with several States Chief Ministers as members should spearhead this process. Inclusive Cities: The poor and lower income groups must be brought into the mainstream in cities. Regulations intended to manage densities and discourage migration both limit the supply of land and require many households to consume more land than they would choose. This drives urban sprawl and pushes up the price of land and the cost of service delivery for all. High standards for parking, coverage limits, setbacks, elevators, road widths, reservations for health centers schools etc. (often not used) prevent the poor from choosing how much to consume of the costliest resource (urban land) to put a roof over their heads, and comply with legal requirements. Informality is now the only path to affordable housing for the bulk of the population in Indias cities. But informality implies illegality and therefore vulnerability. While lower income groups pay dearly for shelter and servicesthey are bereft of normal property rights protections and their investments are thus far riskier than those of the well off. They must instead depend on the good will of bureaucrats and politiciansto safeguard their homes and places of business. These barriers to healthy urbanization come not only at a high human cost, but take a toll on productivity. Chronic informality discourages the very investments in education, health and housing improvements the lower classes need to improve their own lot and contribute more to the national economy. Urban Governance: Meaningful reforms have to happen that enable true devolution of power and responsibilities from the states to the local and metropolitan bodies according to the 74th Amendment. This is because by 2030, Indias largest cities will be bigger than many countries today. Indias urban governance of cities needs an overhaul. Indias current urban governance is in sharp contrast to large cities elsewhere that have empowered mayors with long tenures and clear accountability for the citys performance. India also needs to clearly define the relative roles of its metropolitan and municipal structures for its 20 largest metropolitan areas. With cities growing beyond municipal boundaries, having fully formed metropolitan authorities with clearly defined roles will be essential for the successful management of large cities in India. Financing: Devolution has to be supported by more reforms in urban financing that will reduce cities dependence on the Centre and the states and unleash internal revenue sources. Consistent with most international examples, there are several sources of funding that Indian cities could tap into, to a far greater extent than today: Monetizing land assets; higher collection of property taxes, user charges that reflect costs; debt and public-private partnerships

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(PPPs); and central/state government funding. However, internal funding alone will not be enough, even in large cities. A portion has to come from the central and state governments. Here one can use central schemes such as JNNURM and Rajiv Awas Yojana but eventually India needs to move towards a systematic formula rather than adhoc grants. For large cities with deep economies, this might mean allowing them to retain 20 percent of goods and services tax (GST) revenues. This is consistent with the 13th Central Finance Commissions assessment that GSTa consumption-based tax that creates local incentives for growth and that is therefore well suited for direct allocation to the third tier of government. For smaller cities, however, a better option would be to give guaranteed annual grants. Planning: India needs to make urban planning a central, respected function, investing in skilled people, rigorous fact base and innovative urban form. This can be done through a cascaded planning structure in which large cities have 40-year and 20-year plans at the metropolitan level that are binding on municipal development plans. Central to planning in any city is the optimal allocation of space, especially land use and Floor Area Ratio (FAR) planning. Both should focus on linking public transportation with zoning for affordable houses for low-income groups. These plans need to be detailed, comprehensive, and enforceable. Local capacity building: A real step-up in the capabilities and expertise of urban local bodies will be critical to devolution and improvement of service delivery. Reforms will have to address the development of professional managers for urban management functions, who are in short supply and will be required in large numbers. New innovative approaches will have to be explored to tap into the expertise available in the private and social sectors. India needs to build technical and managerial depth in its city administrations. In the Indian Civil Services, India has a benchmark for how to build a dedicated cadre for governance. India now needs to create an equivalent cadre for cities, as well as allow for lateral entry of private-sector executives. Affordable housing: Affordable housing is a particularly critical concern for low-income groupsin the absence of a viable model that caters to their needs, India can meet the challenge through a set of policies and incentives that will bridge the gap between price and affordability. This will enable a sustainable and economically viable affordable housing model for both government housing agencies and as well as private developers. India also needs to encourage rental housing as an option particularly for the poorest of the poor, who may not be able to afford a home even with these incentives. With the 74th amendment to Indias constitution and the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), India took the first steps toward urban reforms. Going forward, the central government has to play a catalytic role accompanied by a supporting package of incentives. States should recognize that starting early on the urban transformation will give them competitive advantage, attract investment, and create jobsgetting them ahead of the curve. 10. 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? 11. Better Preventive and Curative Health Care India's 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?

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