| Prime Minister Manmohan Singh (second from right), external affairs minister Pranab Mukherjee (third from left), finance minister P. Chidambaram (left), human resources development minister Arjun Singh (second from left) and Planning Commission deputy chairman Montek Singh Ahluwalia (right) at the inauguration of the 52nd meeting of the National Development Council in New Delhi on Saturday. (AFP)
New Delhi, Dec. 9: Prime Minister Manmohan Singh today sought help from states to push through ‘difficult’ reforms to attain a 9 per cent growth during the next five years.
Singh listed inflation as a problem area, admitted that the farm sector was in crisis and that there were major constraints in infrastructure. He added that reforms needed to percolate down better.
“There are major constraints we have to overcome, many of which require difficult policy changes by the Centre and state governments,” the Prime Minister said at the inauguration of the 52nd meeting of the National Development Council for approval of the Draft Approach Paper to the Eleventh Plan.
Singh emphasised the need to maintain fiscal prudence, while raising spending for infrastructure, education and health.
He added that price rise was a matter of concern but the government was committed to contain inflation below 5 per cent. The Prime Minister’s assurance comes a day after the Reserve Bank raised the cash reserve ratio by half a percentage point to suck out excess liquidity as a means to check prices.
The Planning Commission’s five-year economic plan has forecast gross domestic product will increase from 8 per cent to 10 per cent by 2011-12, averaging about 9 per cent growth during the plan period. “This is ambitious no doubt, but feasible,” Singh said.
The top priority for the 11th plan will be agriculture, irrigation and water resources, health and education, critical investment in rural infrastructure and essential public investment.
The country’s economy has seen more that 8 per cent growth in six of the past seven quarters, gaining 9.2 per cent in the three months to September 30. Recognising the need for massive funds for the plan, Singh said subsidies, open or hidden, would be contained for more resources while more investment was needed from the private sector for the development.
Detailing the road map for the average annual 9 per cent growth during 2007-12, Singh said private sector investment would have to be stepped up for the infrastructure sector, which the approach paper has identified as a “major constraint” on achieving the double digit growth.
He sought the chief ministers’ support saying, “A critical issue we have to face relates to the sharing of responsibilities between the Centre and the states.”
The format for the plan itself, which was approved by the NDC today, promises to relax labour laws, de-reserve the small scale sector in areas like textiles, reduce import and production duties besides encourage both contract and cooperative farming in a bid to realise a newly coined slogan — Towards faster and more inclusive growth.
The plan approach paper also seeks to create some 70 million new jobs.