The Hindu : Stiff growth rates for States in 10th Plan

Online edition of India's National Newspaper
Wednesday, Oct 16, 2002

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Stiff growth rates for States in 10th Plan

By Our Special Correspondent

NEW DELHI OCT. 15. The Planning Commission has conceded that achieving the "ambitious" target of eight per cent growth during the Tenth Plan would "critically hinge" on the achievement of higher rates of growth in the States.

Consequently, it has set stiff growth rates for the States to be achieved during the next five years.

While at the Central level, the growth rate of eight per cent has to be achieved from the base level of 5.4 per cent during the Ninth Plan, in the case of the States, the jump is as steep in most cases. For instance, Andhra Pradesh has been set a target of 6.8 per cent for the Tenth Plan whereas its performance during the Ninth Plan was 4.6 per cent only.

Similarly, Arunachal Pradesh has to jump from 4.4 per cent to 8.0 per cent, Assam from 2.1 per cent to 6.2 per cent while Bihar has to jump from 4.0 per cent to 6.2 per cent.

Tamil Nadu has to improve its performance from 6.3 to 8.0 per cent while Maharashtra has to go up from 4.7 to 7.4 per cent.

Similarly, Gujarat has to go up from 4.0 per cent to 10.2 per cent while Karnataka has to increase its Ninth Plan performance of 7.2 per cent to 10.1 per cent during the Tenth Plan.

Punjab, Haryana and Uttar Pradesh too have a daunting task before them. While Punjab has to improve its State Domestic Product from 4.4 to 6.4 per cent, Haryana has to reach 7.9 per cent from 4.1 per cent during the Ninth Plan and Uttar Pradesh 7.6 per cent from 4.0 per cent.

To the credit of the Planning Commission, the growth rate for each State has been specified in consultation with the State Government. According to the commission, such a breakdown was necessary to ensure that there was "non-trivial consistency between the national target and the State-wise growth rates".

The commission has also mentioned that even if all the States perform as targeted, the inter-State income disparities that have come to the fore during the Eighth and the Ninth Plan periods are unlikely to decline.

During the two Plan periods, the rate of growth in Gujarat, Maharashtra, etc., had been generally higher than the States with lower level of per capita income such as Bihar, Orissa and Uttar Pradesh.

According to some studies, the regional disparities tended to increase gradually in the 1980s, followed by a relatively steep increase in the early years after economic reforms were launched and a gradual increase through the 1990s.

According to the commission, the reason for different States performing differently despite the "regionally unbiased" nature of economic reforms could be attributed to the fact that some of the `better-off' States generally had better governance and followed growth-enhancing policies more effectively than others. The poorer States would have to raise their rates of growth to bridge this gap.

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