The Hindu Business Line : NDC `endorses' 10th Plan Mid-Term Appraisal

(From left) The Deputy Chairman, Planning Commission, Mr Montek Singh Ahluwalia, the Prime Minister, Dr Manmohan Singh, and the Finance Minister, Mr P. Chidambaram, at the ninth meeting of Inter-State Council in the Capital on Tuesday. — Kamal Narang

New Delhi , June 28

THE first meeting of the National Development Council (NDC) convened by the United Progressive Alliance Government gave "a broad endorsement of the Mid-Term Appraisal of the 10th Five Year Plan as a "roadmap for policy".

It also set up two sub-committees on evolving a workable agricultural strategy and relieving the acute debt stress of States.

Briefing newspersons on the deliberations and the outcome of the two-day NDC meeting which concluded today, the Planning Commission Deputy Chairman, Mr Montek Singh Ahulwalia, said the main focus was achieving "more rapid and inclusive economic growth", improving institutional reforms to make money spent on social sectors effective and addressing infrastructural inadequacies.

He said the NDC has directed the Plan panel to prepare the Approach to the 11th Plan (2007-12). It will be done by the end of this year.

Mr Ahluwalia said the second sub-committee relates to the main question of the 12th Finance Commission, which recommended restructuring of the government debt. But it did not recommend restructuring of the cumulative debt of States on account of the high lending rates on which they borrowed funds from the National Small Savings Fund. Hence, an NDC sub-committee under the Chairmanship of the Finance Minister, Mr P. Chidambaram, will study this problem.

On the recommendation of user charges for water, raised in the Mid-Term Appraisal, Mr Ahluwalia said the Plan panel suggested that the user charge should cover operation and maintenance and not all capital costs. Similarly, he said, the Plan panel view on an increase in university fee was justified, considering that universities had not revised fees for decades. The priority of the Government is primary and secondary education, and students accessing higher education can absorb an increase, supplemented by a loan and scholarship scheme for the needy.

Earlier, winding up the NDC meeting, the Prime Minister, Dr Manmohan Singh, as the Chairman of the Plan panel, asserted that the environment for the country's development has never been so favourable as it is now. "The challenge before us is to combine the economics of growth, equity and social justice."

Stating that "we have no option but to walk on two legs", the Prime Minister said that, while sustaining the growth impulses, deliberate efforts should be made to reduce disparities in income and wealth to ensure that all sections of society participate in and benefit from growth.

Referring to the concerns voiced by several Chief Ministers on the effects of the recommendations of the 12th Finance Commission such as the level of permissible market borrowings and interest cost on borrowings, mineral royalties and externally-aided projects, Dr Singh said the Finance Minister would work to allay any apprehensions on these counts.

Since rejuvenating agricultural credit system, relief to farmers, improving the quality of extension services and tackling problems of drylands and wastelands and enhancing investments in irrigation have emerged as common concerns, the Prime Minister said the NDC has agreed to set up a sub-committee under the Chairmanship of the Union Agriculture Minister so that its inputs could be used for framing policy in the 11th Plan.

On the issue raised by Chief Ministers about payment of wages on employment programme in cash and coverage of employment guarantee for non-below-poverty-line families, the Prime Minister said both these points had merit and would be considered for inclusion in the final draft of the National Employment Guarantee Bill. Dr Singh also concurred with the need to set up an expert group to develop concrete proposals for restructuring the centrally-sponsored schemes to reconcile the pleas of Chief Ministers either for transfer of the schemes or their amalgamation into four or five broad heads with freedom to develop locally relevant programmes.

On the issue of infrastructure investment by private sector or public-private partnership, the Prime Minister said any successful strategy on this score requires "a well-designed framework policy in which investors have the assurance that standards of service will be maintained and concessions will be transparently awarded." He said the Centre was working towards evolving such a framework.

Dr Singh assured the States that the Centre would facilitate them in their efforts in this regard through enhanced capacities. He was hopeful from the views voiced by the Chief Ministers at the NDC meeting that investment in social infrastructure was a priority for all States and "with our collective will and leadership, we will be able to improve our social indicators in a short timeframe." Reiterating the Finance Minister's stress on outlay versus outcome, the Prime Minister said, "Expansion of outlays without regard to outcomes does not contribute to development. We propose to strengthen the mechanism for monitoring and evaluating performance of existing programmes so that expenditures achieve their stated objectives."

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