Cabinet approval for 10th Plan approach paper

By Our Special Correspondent

NEW DELHI, AUG. 17. The Union Cabinet tonight approved the draft approach paper to the Tenth Five-Year Plan, scheduled to be launched on April 1 next year. The document would now be placed before a meeting of the National Development Council, for the final approval. The NDC has been scheduled to meet on September 1.

A major highlight of the approach paper is that it calls for an economic growth target of eight per cent for the plan period, with emphasis on second generation reforms, reduction in subsidies and hard economic decisions to raise resources for increased investment.

Speaking to reporters after the Cabinet meeting, which lasted for about two and a half hours, Mr. K.C.Pant, the Deputy Chairman, Planning Commission, said the meeting cleared the approach paper in toto, barring a few suggestions of minor changes. The changes, he said, were mainly in the nature of modifications in the language and the emphasis. There were, for instance, suggestions for a greater emphasis in areas such as agriculture and rural development. A few suggestions were also made on sectors like entertainment and sports.

The changes, he said, had been noted and would be incorporated tomorrow. The documents would be positively sent to the States for their reference by Monday so that they could be properly prepared for the September 1 NDC meeting, he added.

Asked about the misgivings about the aim to step up the growth rate of GDP to eight per cent annum as envisaged in the approach paper, particularly in the background of economic slowdown, Mr. Pant agreed that the proposed growth rate was ``undoubtedly ambitious''. But, he said, ``it is achievable provided harsh decisions are taken to raise resources and prune non-plan expenditure''.

Faster growth, he noted, was necessary considering that India's position in the world economy must not only be maintained, but also built upon in the context of the changing global circumstances and also because of the growing aspirations of the people. On the other issues to be discussed at the NDC, Mr. Pant said a sub committee under his chairmanship was considering the convergence, weeding and transfer of centrally-sponsored schemes. ``We recently had a meeting and it was decided that officers of some of the States concerned would meet ahead of the NDC to consider the issue,'' he added. The draft paper emphasises on privatisation and closure of non-strategic PSUs both at the Centre and in the States in a time-bound manner, while fixing an annual target of Rs. 16,000 crores for resource mobilisation by way of disinvestment.

``The underlying strategy for the attainment of target requires an increase in investment rate in the economy to 30-32 per cent, increase in productivity in existing capital assets, undertaking second generation policy reforms with a view to improving the efficiency of new investment and encouraging deepening and broadening of the agenda for reforms across the Centre and the States,'' Mr. Pant said. As part of the effort to create the right economic, political and social ambience to achieve the targets, the Cabinet also decided on a 16-point minimum agenda which, among other things, includes reforms of labour laws and acceleration of tax reforms to move towards a full fledged VAT (value added tax) in a time-bound manner. It would also be placed before the NDC meeting for its approval.

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Section  : National
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