• PAGE ONE
• INDEX
• HOME

GDP will grow by 6.5-7 pc, says Pant

Our Bureau

NEW DELHI, July 1

THE Deputy Chairman of the Planning Commission, Mr K.C. Pant, has expressed confidence that despite the perceived slowdown in the economy, the gross domestic product (GDP) would grow by a healthy 6.5 to 7 per cent this year.

Briefing newspersons on the two day-meet of the full Planning Commission, he said that one of the principal concerns of the slowdown last year was the agricultural sector which clocked a growth of 0.2 per cent. If this sector manages to grow by 0.8 per c ent this fiscal, the 6.5 per cent target can be easily achieved, he said.

He noted that the growth in the agricultural sector would have a multiplier effect on the industry and services sector. Overall GDP, as a result, will experience a rebound.

The draft approach paper to the Tenth Plan aims at stepping up the growth rate of GDP to eight per cent per annum over the Plan period 2002-07. It also proposes to establish specific monitorable targets covering economic, social and environmental dimensi ons of human development.

The Tenth Plan envisages a State-wise break-up of growth and other monitorable targets to build up a requisite policy focus for reducing regional disparities in social and economic attainments.

``It proposes a three-pronged approach to integrate growth with equity and social justice. This would involve making agriculture development a core element of the Plan. It involves bringing about rapid growth in sectors with high quality employment oppor tunities. It also envisages restructuring of targeted programmes, emphasising cross-sectoral synergies for special groups.

The underlying strategy for the attainment of Plan targets is contingent on our ability to increase investment rate in the economy to 30-32 per cent, increase the productivity of existing capital assets and undertaking second generation policy reforms wi th a view to improving the efficiency of new investment. Instrumentalities devised to facilitate and encourage a deepening and broadening of the agenda for reforms across States are needed, he said.

Raising the investment rate in the economy is critically tied with the ability of the Governments to undertake an agenda for fiscal correction outlined in the approach paper. The most crucial aspect of this requires the Union Government to increase its s avings by around 2.9 per cent of GDP. The other important aspect pertains to expediting the disinvestment target, Mr Pant said.

``Improving efficiency of public assets and quality of expenditure requires rationalisation of central sector and Centrally-sponsored schemes through convergence, weeding out and transferring of schemes to the States. Privatisation of non-strategic PSUs and closure of non-viable units will have to be undertaken'', he noted.

The approach paper, he pointed out, recognises the serious gaps that are emerging in infrastructure, particularly in power, railways and public investment in irrigation. The flow of private investment in infrastructure has been below expectation as in ma ny instances the requisite enabling framework is not yet in place.

In power sector, the paper has proposed rationalisation of tariffs through SERCs, unbundling generation, transmission and distributions, privatising distribution and enabling bulk consumers to access power directly.

On the Railways, the paper has suggested corporatisation of all non-core peripheral activities and establishing an independent Rail Tariff Regulatory Authority.

As for measures to increase efficiency in the private sector by continuing he reforms in industrial and trade policy, undertaking legal and procedural changes to facilitate quick transfers of assets. It also talks of adopting a blueprint for removal of a dministrative, procedural and legal hurdles to investment and improving Governments' interface with the public.