New Delhi, Dec. 21: Prime minister Atal Bihari Vajpayee today said the economy should be able to achieve the higher growth rate pegged at 8 per cent and thus put a stop to the widening fiscal gap as well as create jobs for the rising ‘labour-force’.
The Prime Minister, speaking at the National Development Council (NDC) meeting that adopted the Tenth Five-Year Plan, called for a broader consensus on tougher reforms.
“Some of the reform issues are contentious and speedy progress is possible if we build a broad consensus. I propose to consult the chief ministers at an early date to come to a common understanding on these important issues.”
The NDC today accepted the Tenth Five Year Plan which calls for creation of 50 million jobs, reducing poverty by 5 per cent, and garnering Rs 80,000 crore through disinvestment and phased cut in food, fertiliser and petroleum subsidies.
“Our economy will undoubtedly attain the pegged economic growth rate if we are able to remove the many constraints and hurdles in agriculture, industry and services. The trends of economic revival are already visible,” Vajpayee said.
Vajpayee also stressed on an accelerated reform process in the power sector to sustain the increasing energy demand. “I can see the danger light flashing because of the slow pace of reforms particularly in the power sector...we have to undertake thorough going reforms and remove bottlenecks in our energy, transport and water infrastructure,” the Prime Minister said.
Vajpayee said the rising fiscal deficit is the biggest worry ‘both for the Centre as well as for the states’ and that a sustained effort is needed to achieve the 8 per cent growth rate.
“The task won’t be an easy one. We need to increase our revenues and address the problem of subsidies. This could only be fulfilled if all of us, regardless of political diversity, showed unity of purpose and expanded the area of consensus,” Vajpayee said.
In his address, Planning Commission deputy-chairman K. C. Pant sought a perk-up in the labour-intensive sectors since these sector will be able to stem unemployment and contribute towards the country's growth path. “The most pressing issue facing us today is the rapid growth in the labour force...there will be a social unrest if we are not able to tackle this,” Pant said.
Pant added, “To attain the 8 per cent growth rate would call for strong and coordinated effort by all central ministries and by every state.”
The Prime Minister also spelt out seven areas where a consensus is urgently needed. These are fiscal consolidation, stabilisation function of the Plan, public-private partnership, acceleration and expansion of reforms, connecting major rivers, problems of urbanisation and reforms for the poor.
“The finance ministry is preparing a paper on subsidy reforms. We should put in place a firm roadmap for applying correctives in a time-bound manner to ensure they reach the poor and are not ‘siphoned off’ by others,” Vajpayee said.
The Prime Minister urged the states to consider four specific suggestions — governance reforms with special reference to e-governance; removing barriers to internal trade; creation of investor friendly climate; and financial and administrative empowerment of panchayati raj institutions. To aid such governance reforms four empowered sub-committees would be formed, he added
“We have been wedded to achieve our country's all round development through economic planning within a democratic setup,” Vajpayee said.