Montek Singh Ahluwalia shakes hands with Naveen Patnaik in New Delhi on Monday. Telegraph picture

Bhubaneswar, March 3: The 2008-09 annual plan size for Orissa was today pegged at Rs 7,500 crore. This was finalised at a meeting between the deputy chairman of Planning Commission Montek Singh Ahluwalia and Orissa chief minister Naveen Patnaik in New Delhi.

Official sources said the annual plan outlay of Rs 7,500 crore would include additional central assistance of Rs 100 crore (of which Rs 30 crore is grant) for projects of special interest to the state. Another Rs 100 crore of special grant was given for improving the stretch of the highway between Vijaywada and Ranchi within the state.

Expressing his satisfaction over the plan performance of Orissa, Ahluwalia said the investment climate continued to be positive but efforts should be made to engineer early execution of commitments. “Investments in agriculture infrastructure and human development sector needs to be stepped up,” he said.

The deputy chairman stressed on suitable policy measures to create a conducive environment that fosters growth of entrepreneurship and encourages private sector investments. The state government should diversify economy with a view to insulate it from natural calamities and to divert underemployed labour force from farm sector to non-farm sector, he said.

Attention was drawn to high incidence of poverty, unemployment and low per capita income. It was also pointed out that the state’s education and health indicators were still less than the national average. Efforts should be intensified to reduce this gap during the Eleventh Plan Period.

Attention was also drawn to high power transmission and distribution losses and low rural electrification. The state government was advised to give priority to skill development and rural connectivity.

Briefing the Planning Commission on development strategy for the Eleventh Plan, Naveen said the state would aim at a growth rate of over nine per cent during the plan to reduce poverty by 15 percentage points. For inclusive broad-based and sustainable growth of the state, agriculture and allied sectors would be given priority.

Naveen claimed that the state had achieved an annual growth rate of 8.59 per cent during the Tenth Plan Period against the target of 6.2 per cent.

During the next fiscal, 60,000 hectares of additional land would be irrigated.

He urged the central government for establishing educational institutions such as IIT, IIM, IIIT and central universities in the state to meet the growing needs of highly skilled manpower for upcoming industries. Exemption from income tax and central excise tax for a period of 10 years for KBK region was also demanded.

The chief minister also sought immediate revision of royalty on coal and other minerals on ad valorem basis and transfer of entire export duty levied on major minerals to the concern states.

He also reiterated his demand for special category status for Orissa.