The Hindu Business Line : NDC to meet on June 27 to okay mid-term appraisal report

THE National Development Council (NDC) meeting here on June 27, to approve the Mid-Term Appraisal Report to the 10th Five Year Plan (2002-07), will pose some tough questions to State Governments on how they would proceed to implement the slew of correctives in crucial segments to ensure higheconomic growth.

Highly placed sources in the Government told Business Line that the issues would include the steps to be taken to encourage agricultural diversification, reduce losses in the irrigation department and corporation to enable infusion of huge investments, rejuvenate support systems in agricultural extension, credit and delivery systems of inputs and ways to set up mechanisms to price power and water.

The questions do not pertain only to the farm sector. The Plan panel is also keen on ascertaining the views of the States to improve teaching quality and control teacher absenteeism in primary education, spur the involvement of the private sector in secondary education and implement the National Rural Health Mission effectively.

The sources said NDC's agenda also includes eliciting the States' views on measures to encourage public private partnership at the State level to fund investment in infrastructure and efforts to expedite reforms of State electricity boards, since power tariffs need to be rationalised and distribution efficiency improved urgently.

The Plan panel is also eager to know the suggestions of States for making the National Food for Work Programme and the proposed National Rural Employment Guarantee Act more effective, besides the steps needed to build managerial and technical capacity for connecting all villages with a population of 1,000 or more by roads by 2009 under Bharat Nirman.

The sources said the policy-making body is also fervently looking for the States' response to the steps needed to empower Panchayats and the means to overcome the obstacles to transfer of funds/functions/functionaries to them.

Since all the States are stakeholders and participants in the country's economic development, the Plan panel is looking for proper response from them, instead of long-winding speeches and litanies of demands for additional central Plan assistance or using backwardness as an alibi for permanent crutch on doles from the Centre, the sources said.

Contrary to earlier reports about NDC being convened for the first time in Bangalore, the sources said the city was never considered for holding the NDC for an interactive session of the Plan panel with State Chief Ministers.

At an internal meeting presided over by the Deputy Chairman, Planning Commission, Mr Montek Singh Ahluwalia, here late last week, it was decided that the NDC meeting would be held in the capital and that too for a day-and-a-half only, as immediately after the NDC meeting, the inter-State council meeting was also being convened on the second day in the afternoon.

The sources said the Mid-Term Appraisal report has done some plain-speaking about the Plan performance so far.

According to the report, the shortfall in economic growth during the first three years is about 1 per cent per year, against the expected growth rate of 7.4 per cent.

The document concludes that though the GDP growth rate in each of the last the two years of the Plan (2005-07) could potentially be above 7.5 per cent, the overall GDP growth rate for the Plan as a whole is unlikely to exceed 7 per cent. The report concedes that lack of investment is clearly a major problem.

Aggregate investments are estimated to have fallen well short of the targets in the first two years of the Plan and are likely to remain so despite some expected revival in investment activity in the coming years.

A major contributory factor to this slow pace of investment has been the low level of public sector investments, constrained by fiscal prudence considerations.

But private investments have also not displayed the expected dynamism to "crowd into" the space made available by public restraint, the Plan panel mid-term document said.

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