The Hindu Business Line : Montek plumps for more investments in farm sector

Briefing newspersons here on Wednesday after a meeting of some of the southern region Chief Ministers, the Planning Commission Deputy Chairman, Dr Montek Singh Ahluwalia, said: "We need to step up growth rates in agriculture to achieve the 7-8 per cent gross domestic product growth rate."

The sector had been ignored since the mid 90s and the Commission was keen to return focus on to the sector.

Dr Ahluwalia said that discussion would be taken up with all the State Governments as to the methods of raising resources for meeting the irrigation requirements.

"We need to ascertain how resources could be generated for the large irrigation needs of the States," he said. Dr Ahluwalia also that during the last few years there were slippages in the GDP growth targets.

The growth achieved so far during the Tenth Plan period was only 6 per cent as against the target.

He said that the mid-term appraisal of the Plan would also focus on improving the infrastructure bottlenecks.

"There is big infrastructure deficit in the country that needs to be addressed for achieving the growth rate."

For infrastructure, both public and private sector investments would be required, he added. For private sector investments, he said, issues relating to user charges in infrastructure need to be addressed.

Unless this was done, private sector could not be expected make big investments in the sector.

He said that the Planning Commission was concerned over the fiscal situation in the States. However, fiscal adjustments at the State level, he said that the report of the Twelfth Finance Commission (TFC) was awaited.

The report of the TFC, headed by Dr C. Rangarajan, former Governor of the Reserve Bank of India, was expected by the end of this month.

Asked whether the Planning Commission would take up the issue of writing off some of the Central loans to the State, as demanded by some of them.

"We are aware of the excessive debt burden of the States but any decision can be taken only on the basis of the Finance Commission's recommendations," he added.

He said that the Planning Commission was not against subsidies.

"Any subsidies to targeted sector would have to be provided in the respective budgets and targeted to specific sectors," he added. He, however, declined to comment on some of the States providing free electricity to the farm sector.

Two more meetings of the mid-term appraisal meetings would be taken up during the by the Planning Commission, involving the Northern and Eastern regions.

These rounds of meetings are expected to set the tone and agenda for the next Budget.

The Chief Ministers of Andhra Pradesh, Karnataka, Kerala, Maharashtra and Pondicherry attended the meeting of the southern region. Tamil Nadu was represented by its Finance Secretary.

More Stories on : Agricultural Policy | Karnataka

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