K'taka CM asks Plan panel to fix loan limit for states

The Karnataka government today urged the Planning Commission to advise the ministry of finance to set the borrowing limit for each state based on their debt sustaining capacity rather than applying the fiscal roadmap in a mechanical manner irrespective of the debt level of each state.

“The financial position of the state has improved due to consistent resource mobilisation efforts. Karnataka has the capacity to sustain larger amount of debt,” chief minister B S Yeddyurappa said.

He was speaking after making a presentation on Karnataka at the inaugural session of the two-day regional consultation of Planning Commission with southern states on the Approach Paper to the 12th five-year plan, here on Friday.

He expressed confidence that the state would be able to raise the resources to achieve the targeted growth of 9 per cent to 9.5 per cent economic growth, which is likely to be projected during the 12th five-year plan period by the Planning Commission.

“Certain policy initiatives are necessary for achieving the goal of 9 to 9.5 per cent growth during the 12th plan period. The plan must give high priority to identifying efficiency promoting policies through political will and consensus, in critical areas such as irrigation, electricity and water supply,” he said.

The Centre’s gross budgetary support is projected to increase from 4.7 per cent of GDP in 11th Plan to 5.4 per cent in 12th Plan. However, most of this improvement should be retained for the Central Plan itself, he demanded.

The projected increase in the assistance to states is only marginal from 1.2 per cent in 11th Plan to 1.3 per cent in 12th Plan as per deliberations of the full Planning Commission meeting held on April 21, 2011.

“It will be more prudent and effective to provide a larger role to the states in planning and designing the development programmes. They should be given a larger share of the incremental resources that can be mobilized for 12th Plan,” the chief minister added.

The Approach Paper to the 12th plan should highlight the need to increase incomes of farmers and generate employment in rural areas. “There is a need to insure farmers from the vagaries of weather and market,” he said adding that Karnataka welcomes the emphasis likely to be placed in the Approach Paper on treatment of dry land on watershed principle and the suggestion to set up Water Regulatory Authority.

Yeddyurappa also sought the intervention of the Planning Commission to frame guidelines for time-bound clearance for resolving the issues related to environment and fuel linkages for power projects.

The first priority in the allotment of coal blocks must be given to power generation companies. Some of the generation projects are stalled for want of fuel or coal linkages, allotment of coal blocks and environmental clearance, he said adding that the state intends to add 9,500 Mw of power in the 12th plan period.