PM for consensus on growth rate

By Our Special Correspondent

NEW DELHI, JUNE 27. The Prime Minister, Mr. Atal Behari Vajpayee, today called for a revision of Government policies, procedures and institutions so that the economy could grow at the rate of eight per cent during the Tenth Plan period covering 2002 to 2007. He acknowledged the need for an all-party consensus and political unanimity on the issues involved in achieving that growth level.

Chairing a full-meeting of the Planning Commission here, Mr. Vajpayee accepted the reduced target of eight per cent for the Plan period, though he had mandated the commission to try for a nine per cent growth rate.

``The approach paper to the Tenth Five Year Plan talks of raising the growth rate of the economy from six to eight per cent. I am glad that the commission has responded to the challenge that I had placed before them in our last meeting in September 2000. Even this, in my view, is less than the expectations that have been raised in our society in the recent past,'' he said.

The vision articulated in the approach paper would require significant changes in the economic and social development activities, he said. ``The notion of human well-being has to be more broadly conceived to include not only material requirement of all section of our population but also their access to social services, particularly of health and education in a manner that makes them more capable and bring them productively into the mainstream of economic activity. We will have to revise our policies, procedures and institutions in order to unleash the productive potential of our people. The Government at various levels would need to re-invent itself so that its principal role becomes that of a facilitator rather than a controller of individual initiatives. I also accept that this will require an all-party consensus and political unanimity,'' he said.

The Deputy Chairman of the Planning Commission, Mr. K.C. Pant, said raising the growth rate from six to eight per cent was achievable but it would be far from easy. For this, there would be a need to raise more tax and non-tax revenues, reduce non-Plan expenditure and provide more funds for the Plan which could no longer be considered a residual part of expenditure.

Since the meeting has been split into two parts (the next meeting would be on Friday), only about a half of the agenda was reportedly taken up today.

Listed for discussions during the two days are issues such as special category status for Jammu and Kashmir and Assam with retrospective effect from 1969, placing Uttaranchal on the special category list, transfer of Centrally-sponsored schemes, performance of core Plan concept, revision of the Gadgil- Mukherjee formula and change in the loan grant ratio in respect of Central assistance to State Plans, consideration of the draft approach paper to the Tenth Plan and finalisation of the agenda for the next meeting of the National Development Council (NDC).

On revising the Gadgil-Mukherjee formula, sources in the Government said the proposal was two-fold. One is to change the present ratio of 70 per cent loan and 30 per cent grant to non- special category States to a 50:50 basis as has been demanded by many States and also to change the weightage given to various criteria while deciding the flow of resources to a particular State.

Most of the well-performing States have complained that they were being penalised for better performance while laggard States had been getting more funds. Hence, a proposal is now under consideration to reduce the weightage given to population of a State from 60 per cent at present to 55 per cent and that of per capita income from 25 per cent to 20 per cent.

At the same time, the weightage for performance and special problems is to be increased from 7.5 per cent each at present to 15 per cent for performance and 10 per cent for special problems. Within the performance criteria, five per cent weightage would be granted to fiscal management, five per cent for States own revenue mobilisation efforts and five per cent for development of economic and social infrastructure.

However, sources indicated that a final decision on the revision of the Gadgil-Mukherjee formula would be left to the NDC, and the Planning Commission would only make the recommendation in this regard.

The main approach paper to the Tenth Plan is likely to be taken up during the Friday meeting.

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