Concerns beyond the Plan
Development and reforms take centre stage at NDC
The National Development Council (NDC), which concluded its 55th meeting in New Delhi on Saturday, had the mid-term appraisal of the Eleventh Plan (2007-12) on top of its agenda. However, what hogged the limelight at the meeting was a host of other issues. They ranged from concerns over the launch of an integrated action plan to address developmental concerns in Naxalism-affected districts in the country and issues surrounding the introduction of the goods and services tax (GST) from April 2011 to the states’ complaint that they were asked to pay for central legislation for various entitlement schemes such as the right to education. Undoubtedly, all these issues were significant enough to have deserved serious attention at such a unique forum that, through its periodic meetings, also reinforces the country’s oft-forgotten quasi-federal structure. For instance, most states, barring the solitary exception of Gujarat, wanted more funds to tackle what has now come to be known as Left-wing extremism and inclusion of more districts to qualify for financial assistance under the central scheme. In respect of the GST also, the states were together in their demand for higher compensation for the revenue they were likely to lose once the new indirect tax structure was in place across the country.
The Centre’s response to such demands was on expected lines. There was no assurance of any addition to the list of 35 districts already part of the integrated action plan for Naxalism-affected areas. On the question of compensating the states for their revenue loss, the Centre reiterated its assurance of providing up to Rs 50,000 crore to help them meet the gap, if any, in addition to covering their revenue loss due to the withdrawal of the central sales tax. To the extent that the Council offered the chief ministers a forum to vent their views on these crucial issues, the exercise should hopefully lead to better understanding and an amicable solution to the problems raised. But the more substantive issue that came up for discussion pertained to the goals set for the Eleventh Plan. What emerged was that in spite of a global financial crisis, the annual growth rate of the Indian economy for the Eleventh Plan period was likely to be around 8.1 per cent, which, though lower than the target of 9 per cent, would be the highest achieved under any Plan period so far. While this would help salvage the Eleventh Plan by preventing major failures in achieving the key targets, two areas of concern stood out — agriculture and infrastructure. An expected annual growth rate of 3 per cent in agriculture compared to the target of 4 per cent should underline the need for urgent remedial steps, as healthy agricultural growth can not only ensure food security for the entire country, but can also keep a tight leash on food prices. On the infrastructure front, the message at the NDC was clear. The addition of 62,000 Mw of power capacity in the Elventh Plan may be creditable (it is three times the capacity added in the Tenth Plan), but this will be well below the target of 78,000 Mw. With the linkage between power generation and economic growth beyond dispute, the alarm signals are obvious to all. The Council would have done its job if the Centre and the states took the right lessons from the meeting and put in place an action plan to address these concerns.