The Hindu Business Line : Mid-term appraisal may see hard decisions: Montek

THE Deputy Chairman of Planning Commission, Dr Montek Singh Ahluwalia, has indicated that the ensuing mid-term appraisal might contain certain `hard decisions' to be taken in the next five years, although it was a politically sensitive issue, aimed at strengthening the Indian agricultural system.

Apart from stressing on the need to expand the coverage of minimum support price to few more agri-products, Dr Ahluwalia also favoured pumping in more funds towards investments in agriculture rather than subsidies.

Addressing a two-day international seminar organised by the Administrative Staff College of India here on Tuesday, he stressed on a major step-up of investments in irrigation towards boosting agriculture sector growth rate to around 4 per cent.

According to Dr Ahluwalia, attaining at least 4 per cent growth in the agriculture sector was imperative to attain the overall GDP growth target of 7-8 per cent as promised in the Government's common minimum programme.

Expressing concern over the `disturbing and enormous deceleration' in agricultural sector growth from the mid 1990s, the Deputy Chairman said the agriculture growth rate was 3.28 per cent up in 1995-96 and has drastically fallen to 1.8 per cent during 1996-2004.

"What we see is not random shocks, but underlying deceleration. Growth strategy seems to be not working. There has been a sectoral growth failure and not just distribution failure," he said.

Expressing similar concerns over the fall in investments for irrigation projects in the recent past, he said the existing projects would take 30 to 40 years to complete at the current pace of investments.

Notwithstanding the environmental and rehabilitation problems related to major irrigation projects, Dr Ahluwalia favoured a massive step-up in irrigation.

Finding vast unutilised potential for irrigation projects in the country, he stressed on the need to look at the roles of the State and the Centre on these projects.

Although, traditionally, most of these irrigation projects are taken up at the State-level, the poor fiscal status of a number of States will not permit them to take up such massive projects. Only a few States were currently having the resources to step up investments in irrigation projects. This problemneeds to be addressed, he said.

Stating that the deceleration in agriculture growth was causing a great deal of anxiety, the Deputy Chairman said the mid-term appraisal of the Tenth Plan would consider corrective measures to address this problem. He was critical of the excessive bureaucratisation of agricultural research institutes that failed to come up with any breaking technologies for improved performance of the agriculture sector.

Favouring institutionalisation of the agriculture sector and contract farming, he, however, said such issues required better consensus and several legal changes.