Financial Daily from THE HINDU group of publications
Wednesday, Nov 10, 2004
Industry & Economy - Economy
Plan panel may set 2007-08 GDP growth target at 8 pc
Dr Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, with Mr Buddhadeb Bhattacharjee, Chief Minister of West Bengal, in Kolkata on Tuesday. - Parth Sanyal
Kolkata , Nov. 9
THE Planning Commission may consider setting a target of 8 per cent GDP growth for 2007-08, the last year of the ongoing 10th Plan.
The 8 per cent GDP growth was the initial target set by Planning Commission at the beginning of the 10th Plan. However, it was missed and during the mid-term review, it was pegged at around 6-6.5 per cent.
According to Dr Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission, reaching an 8 per cent GDP growth for the total period of the Plan during the next two years was somewhat impractical.
"This is a wonderful suggestion and was made by Dr Asim Dasgupta, the West Bengal Finance Minister. We may consider it. However, for that, we need to introduce a number of policy correctives," Dr Ahluwalia told presspersons here on Tuesday.
He was in city to meet representatives of the Bihar, West Bengal, Jharkhand and Orissa governments as a part of the mid-term review of the Plan.
The Chief Ministers of West Bengal, Orissa and Jharkhand met Dr Ahluwalia separately. The issue of reduction in the interest rates for loans given to States by the Union Government came up at every meeting.
Prior to Dr Ahluwalia's interaction with presspersons, Dr Dasgupta stated that if the Union Government reduces the average interest rates from 11.5 per cent to 6 per cent, then the West Bengal Government can save approximately Rs 2,500 crore per year which in turn could be invested in infrastructure projects.
Dr Ahluwalia said that all State Governments have suggested reduction in interest rates and accepted that there was room for moderating the rates. However, a final decision on this matter would be taken after receiving the mid-term review report from the 12th Finance Commission. The report is likely to be ready by the middle of December.
Mr Patnaik, after his meeting with Dr Ahluwalia, said that he had urged the commission to give special status to the State of Orissa as it was calamity prone. Moreover, a large section of its population are tribals.
"We have asked the Union Government that whatever funds are being allocated to us, 90 per cent of this should be in the form of grant and the rest as a loan," Mr Patnaik told presspersons.
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