Planning Commission aims at 8% growth over 5 years

NEW DELHI: Call it omission, or a deliberate move to distance the Plan process from intra-government quarrels over disinvestment. The Planning Commission totally skipped resource mobilisation by way of disinvestment in its 30-slide presentation before the Union Cabinet, which cleared the 10th Plan document.

The Plan seeks to attain an average growth rate of 8% for the economy over ’02-03-’06-07. The Planning Commission has, in its document, pegged Rs 78,000 crore as the contribution of disinvestment proceeds towards the Rs 9,21,291 crore Central plan outlay over the next five years. Thus, disinvestment proceeds are slated to finance 11% of the Central budgetary support to the Plan. And, interestingly, this avenue of resource generation for Plan financing could not find a mention in the panel’s official presentation before the Cabinet.

When quizzed, Planning Commission deputy chairman KC Pant said the Plan document contained broad targets on various fronts and his concern was the total gross budgetary support and not individual sources of resources. “I am not putting myself in the position of the Finance Minister. The gross budgetary support is what concerns us. We are not going into the specifics of how that is generated,� Mr Pant said. While the official presentation talks at length about increasing tax-GDP ratio, removing tax concessions, having a Central and state VAT, cut in subsidies and downsizing, it keeps mum on disinvestment targets and the ways to achieve it.

Mr Pant, when repeatedly asked, said the Commission tries to spell out a total picture of resource mobilisation, including that from taxes, savings and disinvestment. He tried to play down resource mobilisation on the disinvestment front, saying it only constituted 2% of the total size of the Tenth Plan. He added: “If disinvestment receipts were to overshoot the target, it will not translate into a hike in Plan size.�

The total public sector outlay for the Plan is pegged at Rs 15,92,300 crore including a gross budgetary support of Rs 706,000 crore. The Central plan will have an outlay of Rs 9,21,291 crore and the outlay for the states and union territories will be Rs 6,71,009 crore.

The three-volume document has proposed to carry forward key reforms, particularly in agriculture, to generate 50m jobs in the next five years, besides raising FDI flow to $7.5bn annually, he said. This is the first time that the Plan document has introduced a volume dedicated to state plans and their concerns and strategies.

The Plan seeks to focus not just on economic growth but also on improving the quality of life of people. Touting the Tenth Plan as the “people’s Plan�, Mr Pant said the commission has assigned monitorable targets for social objectives for the first time.

It talks of reduction in poverty ratio from 26% to 21% by ’07, providing potable drinking water in all villages, cleaning major polluted rivers, growth in gainful employment to keep pace with addition to labour force, increase in literacy rate from 65% to 75% and universalisation of elementary education by ’03.

The Tenth Plan also anticipates a rapid growth in labour forces over the next decade. “At current rates of growth and with the current labour intensity in production, we face the possibility of rising unemployment which could lead to social unrest,� the document said. The Plan focuses on creating 50m job opportunities by placing emphasis on high-employment sectors like agriculture, irrigation, agro-forestry, SMEs, IT and other services.

Asked whether the 8% target looked possible in view of RBI’s lowering the growth target to up to 5.5%, and NCAER also pegging economic growth at 4.8% for the current financial year, he said, “There is no relevance in comparing the two targets. One bad agriculture year can disturb the overall growth targets.� However, he added a word of caution that ambitious growth targets required consensus on hard economic decisions by all political parties at the Central and state levels.