The Hindu Business Line : `Growth rate remains below Plan panel target' — PM concerned over farm, industrial growth

The Prime Minister, Dr Manmohan Singh, with the Deputy Chairman, Planning Commission, Mr Montek Singh Ahluwalia, at the 51st meeting of the National Development Council in the Capital on Monday. - Kamal Narang

New Delhi , June 27

THE two-day National Development Council (NDC) meeting on Monday got underway with the Prime Minister, Dr Manmohan Singh, highlighting the critical points of the Mid-Term Appraisal (MTA) of the Tenth Plan (2002-07), particularly the tepid agricultural growth, the below potential growth of the manufacturing sector and the inadequate total Plan expenditure of the Centre and the States.

Inaugurating the 51st meeting of the NDC here, the Prime Minister said that against the 8.1 per cent growth target for the Tenth Plan, the growth performance thus far was below the target, averaging 6.5 per cent in the past three years. He said that though his Government set a target of taking growth to between 7 and 8 per cent in the remaining two years, "we cannot achieve the original Tenth Plan target of 8 per cent growth over the Plan period as a whole," even if this was achieved.

Drawing attention to the deceleration in agricultural growth to a dismal level, Dr Singh said there is a need to focus attention and increase investments in the entire chain of agricultural activities. These include the supply of inputs and credit, diversification of crops, better production practices and improved post-harvest management. "We must have the ambition to double our agricultural production in 10 years and aim to be a significant player in global agricultural trade," he said. An NDC sub-committee might be set up to work out the necessary steps for concrete action, he added.

Dr Singh also laid emphasis on employment creation, education, health, gender, weaker sections, and governance at a district level to ensure that the benefits of development do not bypass the poor and the needy.

Stating that the performance of the manufacturing sector remains much below the double digit growth rate, Dr Singh said that the message emerging from the Mid-Term Appraisal is that "our industrial performance is ready to accelerate, provided we can give Indian industry better quality infrastructure." That is why the Union Government accorded importance to infrastructure development. As major expansion and up-gradation in power, roads, railways, ports and airports and telecommunications connectivity demand massive investment, there's a need for public-private partnership (PPP) to leverage limited public sector resources by resorting to private investment and PPP to the maximum extent possible. He said this approach is relevant for both the Centre and the States.

On the power sector, the Prime Minster said an environment to attract investments by public and private sectors would be needed and for this, the financial health of the electricity boards in the States must be restored. This could not be done without the reduction of aggregate technical and commercial (AT&C) losses and the objective is to bring down such losses by 10 percentage points in two years with the support and commitment of the States. He also sought the cooperation of the States in checking unplanned roadside development on the National Highways that threaten to devalue and impair the road assets that are being created. The Prime Minister also sought the active support of the States for Bharat Nirman that lays stress on the creation of critical infrastructure in rural areas.

On the complaint of the States about their worsening finances in the light of the report of the Twelfth Finance Commission that had brought a major alteration in the manner in which States would have to manage their affairs, including their borrowing, the Prime Minister said that in the long run, it would increase the flexibility of State Governments and lead to a more healthy relationship between the Centre and the States.

Later, in his presentation on the MTA report and opening remarks, the Planning Commission Deputy Chairman, Dr Montek Singh Ahluwalia, said that the state of the economy presents now "a mixed picture" with "several strengths but also some important weaknesses."

He said the MTA calls for a move towards more rational electricity pricing and electricity for agriculture should be priced differently in areas where ground water has been severely depleted. So is the policy of subsidising micro-irrigation, which should be linked to ground water status. He said a major message of the MTA is that massive investments are needed in infrastructure sectors. He said in the power sector, the Plan panel regards open access as a critical element in power sector reform that would bring in competition to the system and attract investment for eliminating shortages. He urged the States to accelerate the introduction of open access.

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