Rains may rein in inflation: PM

NEW DELHI: Prime Minister Manmohan Singh has said that inflation in wholesale prices should come down to around 6% by December if monsoon remains normal. He said better agricultural performance, especially food production, would help in tackling the problem of inflation. He, however, said that agriculture is not receiving the priority it deserves in states.

Addressing chief ministers at the meeting of the National Development Council on Saturday which met to approve the mid term appraisal of the Eleventh Plan, the Prime Minister lauded finance minister Pranab Mukherjee’s plan to implement the goods and services tax (GST) and urged the chief ministers to give full support to the proposed implementation of GST with effect from April 1, 2011. In a press briefing after the meet, the Planning Commission said that a broad consensus was emerging between the Centre and the states on the GST.

“We are almost there,” said Planning Commission member Abhijit Sen, adding that there were some minor issues like the issue of taxation of food grains raised by Punjab and Haryana. Since the Centre has assured that any loss in taxation would be covered by it, there shouldn’t be any problem, he said.

The Prime Minister announced the setting up of a committee of the NDC to go into the “complex challenges” of urbanisation under urban development minister Jaipal Reddy, which would present a report with a period of twelve months. “This committee would give us inputs for the Twelfth Plan,” said Planning Commission deputy chairman Montek Singh Ahluwalia.

Dr Singh acknowledged that the Mid Term Appraisal projection of 8.1% annual growth rate for the Eleventh Plan is lower than the 9% target, but added that it’s still the highest ever achieved in any Plan period.

He emphasised that the objective was not just growth, but “inclusive growth”, and said that the data about progress of inclusive growth based on 27 monitorable indicators would be available only some time later.

Talking about public private partnership (PPP) as an instrument to supplement public investment, Prime Minister said there is a need to improve the terms and conditions of awarding PPP projects to make it more transparent and to ensure bidding is competitive and public interest is adequately safeguarded.

On power sector, the PM mentioned that the total loss of power in 2009-10 is estimated at `40,000 crore. “This is simply not sustainable and unless corrected it will make the whole power sector enviable, since investment in generation and transmission depends upon the ability of the distribution companies to pay,” he said.

After the meeting, he expressed his unhappiness about lack of focus on the issue of distribution losses. “The states should look at the suggestions given in the MTA on the issue,” he said. Referring to the Left Wing extremism, PM admitted that development schemes have not worked well in some backward and impoverished parts, particularly the areas inhabited by the tribal population. He talked about good governance including effective implementation of the Forest Rights Act and Panchayat Raj (Extension to Scheduled Areas) Act (PESA). He said the Planning Commission is working on an integrated programme of development for selected backward districts which would help strengthen the developmental element in the fight against extremism.

He also touched upon sectors such as health, education and skill development. He said initiatives like the Right to Education and the National Rural Health Mission need to be implemented with vigour.