12th Plan growth rate pegged down, Jaya walks out of NDC meet

NEW DELHI, Dec 27:
Reflecting the economic downturn, the growth target for the 12th Plan was today scaled down at a meeting of the NDC which was marred by an angry walkout by Tamil Nadu Chief Minister J Jayalalithaa, while Prime Minister Manmohan Singh favoured a phased hike in energy prices to rein subsidy bill.
The day-long meeting of the Chief Ministers, which approved the 12th Plan Five Year Plan Document aimed at 8 per cent average annual growth, from 8.2 per cent in the draft, saw the Prime Minister issue a warning that failure to control subsidies would lead to cut in plan expenditure.
Singh also favoured a phased hike in the prices of petroleum products, coal and power as they are underpriced.
Finance Minister P Chidambaram added his bit saying that it was imperative to contain the fiscal deficit. Some measures may cause immediate pain but they were necessary to bring down the deficit to 3 per cent of the GDP in the next three years, he said.
There was high drama early in the meeting when Jayalalithaa staged a walkout protesting against the “big humiliation” when a bell was rung signalling her to conclude her speech after ten minutes of her taking the floor.
Later she cut short her stay and returned to Chennai saying that putting a time limit on the speech was a conspiracy stifle the voice of Chief Ministers.
Fresh from his electoral victory, Gujarat Chief Minister Narendra Modi and his Madhya Pradesh counterpart Shivraj Singh Chauhan backed Jayalalithaa on the issue.
Modi launched his own attack on the Centre saying the country was in the grip of pessimism because of “policy paralysis, intellectual bankruptcy and lack of leadership” at the Centre.
In his speech, the Prime Minister drew attention to the need to control subsidies saying while some of them were a normal part of any socially just system, they should be well-designed and effectively targeted. The total volume must be kept within limits of fiscal sustainability.
“Failure to control subsidies within these limits only means that other Plan expenditure have to be cut or the fiscal deficit target exceeded,” he said.
Singh, in his closing remarks, spoke about lowering of the growth target and said several Chief Ministers have recognised that this was only a realistic reflection of the external constraints on the growth.
Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters after the meeting that the NDC has approved the 12th Plan having marginally reduced the growth rate to 8 per cent.
“We expect with the growth rate of 5.8 per cent this fiscal and a little over 7 per cent next fiscal, and with extra efforts in the remaining three years, we can reach 8 per cent,” he said.
A battery of Union Ministers and Congress Chief Ministers rejected Jayalalithaa’s criticism but Prime Minister himself made a subtle reference to it.
“…I thank all Chief Ministers for complying with the electronically imposed time limit. Had they not complied with the limit, we would not have been able to accommodate 40 speakers even in this long session”. He said in his concluding remarks.
The Prime Minister assured all Chief Ministers that the points raised by them have been taken note of and will be considered carefully by the Planning Commission.
The 12th Plan seeks to reduce poverty by 10 percentage points in the five year period and generate 50 million jobs in the non-farm sector.
It aims to raise agriculture growth rate to 4 per cent and achieve 10 per cent manufacturing sector growth.
The 12th Plan also aims at increasing investment in infrastructure sector to 9 per cent of the GDP by the end of the Plan period.
The other targets specified in the Plan document include connecting all villages by all-weather roads and reducing power sector transmission losses to 20 per cent.
The Plan envisages completion of the eastern and western dedicated freight corridors by 2016-17. (PTI)


Please enter your comment!
Please enter your name here