The Hindu Business Line : Karnataka Plan size pegged at Rs 16,166 cr — Release funds for development projects: Ahluwalia

PLANNING TIME: The Karnataka Chief Minister, Mr Dharam Singh, calling on the Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, to finalise the annual Plan of the State on Friday. - Ramesh Sharma

New Delhi , Jan 13

THE Annual Plan size of Karnataka for 2006-07 has been pegged at Rs 16,166 crore here on Friday at a meeting between the Deputy Chairman of the Planning Commission, Mr Montek Singh Ahluwalia, and the State Chief Minister, Mr N. Dharam Singh.

In his preliminary remarks, Mr Ahluwalia said Karnataka was among the better performing States in the country as it had been doing well in the social sector with its health indicators better than the national average. He, however, mentioned that the Plan panel was concerned about the constraints faced by States in releasing funds for development projects.

Analysis on fiscal strength: He said the Commission was supportive of fiscal deficit being linked to growth potential and noted that the Plan panel would carry out an analysis on the fiscal strength of each State to assess the level of borrowings that each State could be permitted. He regretted that the States with positive balance were reluctant to release funds for development programmes.

He said the State was likely to get substantial fund flow from the Centre for programmes such as rural health mission, Bharat Nirman, national urban renewal fund and backward region grant fund. He asked Karnataka to conserve resources to expedite the development of backward districts and help the Centre in putting the country in a sustainable high trajectory growth path.

Mr Ahluwalia said the Prime Minister was keen on making Bangalore along with Mumbai a modern and globally comparable metropolitan city.

High priority sectors: The Chief Minister said irrigation, energy and transport would get high priority in the State's next year development plan with substantial allocations going to these sectors. He said Karnataka was one of the few major States, which had consistently realised more resources than projected in the Five-Year Plans.

Plans for Bangalore: Mr Dharam Singh said the State continued to be the forerunner in IT and biotechnology sector and Bangalore city was the most sought after destination for investments in this sector. He said industrial investments of over Rs 78,000 crore had been cleared since the present coalition Government assumed office.

Development of Tier-II cities of Mysore, Mangalore, Hubli-Dharwad and Gulbarga has been taken up to make them more attractive for investment. He said an outlay of Rs 7,000 crore had been planned for Bangalore city in addition to investment under national urban renewal mission.

He sought the Plan panel's approval in getting the Bangalore City Metro Rail Project. The Chief Minister also sought its support for co-finance to the extent of 50 per cent of special package of Rs 9,600 crore over eight years for the development of backward districts in Northern Karnataka.