The Hindu : Andhra Pradesh News : Big push for irrigation a must: Montek

Online edition of India's National Newspaper
Wednesday, Nov 17, 2004

Andhra Pradesh

Andhra Pradesh

Big push for irrigation a must: Montek

By Our Special Correspondent

The Governor of the RBI, Y.V. Reddy (second from left), the Chairman of the Administrative Staff College of India, M. Narasimham, and the Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia, at the international seminar `India's econ omic and social development: national and international perspective' held in honour of Ch. Hanumantha Rao (left) in Hyderabad on Tuesday. Photo: P.V. Sivakumar

HYDERABAD, NOV. 16. Increased investments in irrigation are needed to boost the agriculture sector growth rate to 4 per cent, which is essential to achieve targeted growth rate of 7-8 per cent for the economy, observed Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission.

He was delivering the keynote address at the seminar on `India's Economic and Social Development: National and International Perspective,' organised by Administrative Staff College of India (ASCI) and the Centre for Economic and Social Studies (CESS) in honour of Ch. Hanumantha Rao, Chairman of CESS and former member of the Planning Commission, who turns 75 this year.

Disturbing trend

Up to 1995-96 the agriculture growth rate was 3.28 per cent, but after that there had been "disturbing and enormous deceleration" with growth rate of just 1.8 per cent. "What we see is not random shocks, but underlying deceleration. Growth strategy seems to be not working, and there is a sectoral growth failure," he said.

"The long-term Gross Domestic Product (GDP) growth rate of 7-8 per cent is not possible, unless 4 per cent agriculture growth rate is achieved," he said, adding it would be a massive task to achieve without radical changes in policy. It would take 30 to 40 years to complete existing projects at the present pace of investments.

Hard decisions

Some `hard decisions' would have to be taken in the next five years, he said referring to issues that needed to be addressed. Technology-generating institutions were unable to give a push to agriculture. The research system was `bureaucratised' and hence not conducive. Cheap power and free power was a problem which was more widespread than thought of. Contract farming required better consensus, but legal issues needed to be addressed, he said.

The Reserve Bank of India Governor, Y.V. Reddy, underscored the need for reviewing the policy of rural credit in a comprehensive and thorough manner. There was need for legal and institutional changes to governance, regulation, and functioning of rural cooperative structure and Regional Rural Banks (RRBs), he said and hoped a consensus would emerge on fundamental changes needed.

Problems of coops

Referring to the non-performing assets and erosion of deposits in cooperatives and RRBs, he said the RBI favoured early restructuring and recapitalisation as it might not be appropriate to continue to permit institutions that were not solvent to seek and accept public deposits.

Yoginder K. Alagh, Chairman, Institute for Human Development, New Delhi, and former Union Minister, released Mr. Hanumantha Rao's book titled `Essays on Development Strategy, Regional Disparities & Centre State Financial Relations in India."

Printer friendly page
Send this article to Friends by E-Mail

Andhra Pradesh