The Hindu Business Line : Montek promises flexibility on Centrally sponsored schemes

`Unless farmers are protected from unequal foreign competition and the vicissitudes of price fluctuations in the world market, the agrarian crisis will persist.'

Thiruvananthapuram , July 21

The Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, on Friday expressed willingness to have a re-look on the policy governing Centrally sponsored programmes in order that State Governments get funds to finance locally relevant schemes.

He was speaking to newspersons on the sidelines of the Regional Consultations of Draft Approach Paper for the Eleventh Five Year Plan (South Zone) where more than one attending Chief Minister made a demand for revisiting the relevant policy framework.

The Chief Ministers of Kerala, Karnataka, Andhra Pradesh and Pondicherry and the Planning Board Vice-Chairman of Tamil Nadu are attending the consultations here.

FARM POLICY

In his speech, the Kerala Chief Minister, Mr V.S. Achuthanandan, said that tariff rates on commodities are of vital importance to his State. Lives of millions of peasants and farm labourers depend on them but the State had absolutely no say in tariff policy. "This is clearly untenable, with potentially very serious implications for the future."

Unless farmers are protected from unequal foreign competition and the vicissitudes of price fluctuations in the world market, the agrarian crisis will persist. The National Commission on Farmers has proposed that all major crops be brought under the minimum selling price-procurement system. "We endorse this position, and request that it be extended to more crops," he added.

The Public Distribution System (PDS) should be allowed to stay the course. The concern over inclusion of well-to-do consumers, which is the main argument against a universal PDS, is misplaced.

A progressively declining share in the total transfers from the Centre is one reason for the fiscal crisis in the State. Mr Achuthanandan demanded that the Fiscal Responsibility and Budgetary Management Act be removed from statute books in order that State Government finances are put on a firmer footing. Debt relief needs to be delinked from such legislation.

INFRASTRUCTURE

The Pondicherry Chief Minister, Mr N. Rangasamy, said that the financial requirement of infrastructure is so large that no amount of resources mobilisation within the public sector can meet this challenge. "There is need to identify alternative modes of funding infrastructure related projects for sustaining the growth momentum," he said.

Land acquisition process for a South Economic Zone is in progress in his State. Final approval of the Centre is awaited for starting construction activities. This zone will be primarily for automobiles, auto components and IT and related activities. Total project cost is Rs 400 crore, out of which Rs 60 crore will be from the Government being 26 per cent of equity. A major tourism expansion drive is also in the offing in Pondicherry.

Raising funds through market borrowings to bring up the loan component of the Central assistance to the State's Annual Plan for 2006-07 is proving tough what with the small resource base. The Centre should release additional assistance for funding infrastructure projects.

WEAKNESSES

The Andhra Pradesh Chief Minister, Mr Y. S. Rajasekhara Reddy, said that the economy is doing well in few enclaves such as infrastructure and IT sector and these need further consolidation. But there are critical weaknesses bordering on crises in the agricultural sector.

If not corrected, it would not only undermine planned economic growth but also affect equitable social development. The decadal deceleration in the farm sector needs to be reversed, Mr Reddy said. Highest priority should be accorded to irrigation and soil and water management.

POLICY INITIATIVES

The Karnataka Chief Minister, Mr H. D. Kumaraswamy, said that certain policy initiatives are necessary for achieving 8.5 per cent growth during the 11th Plan. Efficiency promoting policies should be formulated in critical areas such as irrigation, electricity and water supply.

The present status of infrastructure in institutions of higher learning needs to be improved drastically. The Centre should enhance its scale of investment in areas of rural health services through the State Government.

With globalisation of agricultural trade, the Indian market is open to farm imports. It is absolutely necessary that suitable legislative and institutional framework for quality regulation for farm inputs and outputs is in place without delay. A lot needs to be done in insuring farmers from the vagaries of weather and market, Mr Kumaraswamy added.