Financial Daily from THE HINDU group of publications
Wednesday, Sep 25, 2002
Industry & Economy
Make use of common economic space for balanced development Planning Commission Deputy Chairman, Mr K.C. Pant
NEW DELHI, Sept. 24
THE Planning Commission Deputy Chairman, Mr K.C. Pant, has proposed joint development strategy by both the Centre and the States to take advantage of the "common economic space'' within the country for ensuring balanced development.
"Today, if Europe could take advantage of the common internal market, we are much better placed to effect such a common market across the country by removing internal barriers and ensuring free flow of movements of goods and services across the length and breadth of the country," Mr Pant told Business Line here in a wide-ranging interview.
This requires, he said: "Not only continuation of the ongoing economic reforms but also reforms in other realms including governance, administrative and judicial reforms and the need for decentralised approach and people's participation in development programmes."
Asked about the agenda for the full meeting of the Plan panel scheduled for October 5 to be presided over by the Prime Minister who is also the Chairman of the Planning Commission, Mr Pant said that the meeting would endorse the Draft Approach document of the Tenth Plan (2002-07) which would then have to be approved by the Union Cabinet and the National Development Council (NDC) subsequently.
Mr Pant said the Plan panel had taken into account the current situation, low rate of growth and drought in line with the pattern followed by past Plan processes which had to take into account both the past experience and the current situation and then fashion projections for the future. "While making the projections, the most important question is that where do you want to reach after certain number of years," he said.
In a world in which globalisation is increasing competitiveness and the opportunities, India has many advantages. "One of the advantages we have is the demographic factor as we have a window of opportunity for the next 10 to 15 years with number of working age people being comparatively larger."
This meant that while growth was important, we would also have to hammer out the areas of growth to speed up to see that it would provide gainful employment in the wider sense in informal and unorganised sectors, he added. Again, while emphasis on primary and elementary education was absolutely needed to get over gender bias and bridge urban-rural divide, Mr Pant said that though education is a State subject, "we are providing funds in the Central sector in a big way and we are putting greater emphasis on linking education to work by strengthening technical and vocational education".
As the Plan has to encapsulate "certain vision and ambition'', Mr Pant said that "the whole Approach Paper does not simply state only the rate of growth which means nothing if the growth is not related to social and economic targets that are monitorable and the whole lot of steps that are needed to be put in place to realise them".
To a specific query on the N.K. Singh Committee report on foreign direct investment (FDI), Mr Pant said that the report had gone to the Group of Ministers who would study it and come out with their comments which would be further scanned by the Cabinet Committee on Economic Affairs (CCEA) before a final decision on its various recommendations would be taken.
On the recent bailout of the UTI, Mr Pant said that bonds were being floated to raise resources and that "the Finance Ministry is fully capable of finding ways to ensure that the confidence of the investors is maintained" in the mutual fund.
When reminded about the poor agricultural growth in three of the five years in the Ninth Plan and the inaugural year of the Tenth Plan too, Mr Pant said that the Plan panel was fully aware of the immense opportunity this sector offered in terms of stoking rural demand and generating employment and ensuring higher export returns through processed food exports.
Asked about the finances of the State, Mr Pant said that they remained a matter of concern but hastened to add that the concept of core Plan introduced by him seemed to be working well and to the satisfaction of the State Governments.
"Earlier, there was a tendency to automatically augment the Plan size which was a political necessity. But when I insisted why can't you go by the resources in sight'' instead of putting up populist projects, the States saw merit in that and "in the last one or two years have been trying to put their house in order'' with most of them entering into a memorandum of understanding (MoU) with the Finance Ministry.
"I am not trying to understate the seriousness of the situation; nor I am unmindful of the steps the States have been taking to correct the problem'', Mr Pant quipped.
He said that the 8 per cent GDP growth postulated in the Tenth Plan was achievable, given the encouraging factors in the form of foreign exchange reserves and improved performance in the industrial and export sectors.
He said that one important factor for providing higher investment was reversing the Government dissaving. He said that this could be tackled by ensuring that public sector returns went up and tax-GDP ratio improved.
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