Dandavate Forecasts 6.5% Gdp Growth This Year

At the Economic Editors conference in the capital yesterday, Dandavate said the growth in gross domestic product (GDP) for 1996-97 will be around 6.5 per cent and agricultural growth will touch 4 per cent.

Outlining his priorities for the ninth plan, he said employment- oriented programmes for poverty alleviation would head the list, followed by improvements in infrastructure, especially in rural areas.

Population control and encouragement of women as instruments of economic and social change would be the other areas of emphasis in the coming plan.

He said the total increase in plan outlay will be roughly 35 per cent, adding that the draft approach paper is expected to be adopted by the National Develop-ment Council in the first week of December after being approved by the full Planning Commission and the cabinet.

 

Dandavate expressed the opinion that the Lakdawala poverty estimate, according to which the poverty level in India is currently 39.3 per cent, is closer to reality than the official estimate, according to which the level is 19 per cent.

He pointed out that the country has already entered a debt trap, adding that the Planning Commission will take up a formal proposal on capping government borrowings with the Union finance ministry and the Reserve Bank of India .

Commenting on state outlays, Dandavate said the states had been clearly told that the greater their allocations, the higher would be the outlays given to them.

Dandavate warned the states against indiscriminate transfer of Plan funds to the non-Plan side, which had taken place in a big way during the Eighth Plan.

The Planning Commission deputy-chairman expressed his opposition to an agricultural income tax as incomes in this sector are yet to be stabilised and depend on the vagaries of the monsoon.

Dandavate declined to commit a time frame for full convertibility on the capital account and ruled it out till all fiscal imbalances can be ironed out.

He said monetary expansion should be adequate to encourage growth but moderate enough to check inflation.