The Hindu : Let us push ahead with reforms: PM

Online edition of India's National Newspaper
Sunday, Dec 22, 2002

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Let us push ahead with reforms: PM

By Alok Mukherjee

The Prime Minister, Atal Behari Vajpayee, the Deputy Prime Minister, L.K. Advani, and the Deputy Chairman of the Planning Commision, K.C. Pant, with the Chief Ministers (L to R), Tarun Gogoi (Assam), A.K Antony (Kerala), Ashok Gehlot (Rajasthan), Ajit Jogi (Chhatisgarh), Mufti Mohd Sayeed (Jammu and Kashmir), Mayawati (Uttar Pradesh), N.D. Tiwari (Uttaranchal) and Jayalalithaa (Tamil Nadu), at the 50th National Development Council Meeting in New Delhi on Saturday. — Photo: Anu Pushkarna

NEW DELHI DEC. 21. The National Development Council (NDC) today approved the Tenth Five-Year Plan covering the years 2002-2007, envisaging an eight per cent growth per annum during each of the five years, creation of an additional 50 million jobs, reducing poverty by five per cent during the Plan period, rationalising subsidies and mobilising over Rs. 16,000 crores annually through public sector disinvestment.

At the conclusion of the meeting, the Prime Minister, Atal Behari Vajpayee, announced that with some of the reform measures being contentious, he would hold consultations with the Chief Ministers at an early date to build a broad consensus on these issues.

Earlier, in his opening address at the meeting, Mr. Vajpayee placed renewed emphasis on pushing ahead with the economic reforms programme and announced the setting up of four sub-groups of the NDC to work out the modalities to improve governance, implement policies and programmes, bring down barriers to internal trade, create an investor-friendly climate and provide more resources to the panchayati raj institutions.

`No need for scepticism over growth rate'

Mr Vajpayee told the Chief Ministers that there was no need to be sceptical of the Tenth Plan target of eight per cent growth as the economy had shown a great resilience in the face of adversity — domestic and global. "If we remove the many constraints and hurdles in agriculture, industry and services, India's economy will undoubtedly attain a higher growth rate," he said.

The Prime Minister again drew the Chief Ministers' attention to the problem of fiscal deficit at both the Central and State levels, saying the high deficit was crowding out productive investment. He urged the States to ensure that the value added tax (VAT) system was introduced countrywide from April 1 next year as that would open the door to increased revenues for the States too. He also referred to the document being prepared by the Union Finance Ministry on subsidies which needed to be reformed. "We need to be clear in our minds for what purposes the subsidies are meant, for whom, to what extent and how we can make sure that they reach the poor and are not siphoned off by others," Mr. Vajpayee said.

Emphasising the need for increased public-private partnership in the widest possible range of activities in both physical and social infrastructure to leverage private sector resources and skills of development, he asked the NDC to endorse the norm that once the PPP model contracts were validated, they should be the standard modality for financing projects and schemes in each of these areas.

Mr. Vajpayee warned that "danger lights were flashing because of the slow pace of reforms in the power sector" and called for undertaking thorough reforms and the removal of bottlenecks in the energy-transport-water infrastructure. An action-plan had been prepared for re-engineering all regulatory requirements, whether at the Central, State or municipal levels, involved in the execution of projects. He sought the cooperation of the State Governments in its implementation so that the present inefficiencies and harassment at the business-government interface would disappear.

`Review the jungle

of laws'

Linking reforms to the poor, Mr. Vajpayee called for a review of "a jungle of laws, in particular, municipal, police and forest laws," many of which had not been reformed since many decades and rendered the numerous legitimate occupations of the poor as illegal. He also touched on the problems of urbanisation and the proposed plan to connect major rivers in the country and sought the cooperation of the States in these areas.

Mr. Vajpayee proposed the setting up of four sub-groups of the NDC, one to deal with governance reforms as the "best policies and programmes can flounder on the rocks of poor governance and implementation".

The second would consider all barriers to internal trade on merits and decide what would be the most appropriate steps that could be taken.

The third would look into the wide range of controls and restriction from the past which hindered the creation of an investor-friendly climate and work out ways to dismantle such barriers.

The fourth would look into problems faced in transferring functions and resources to the panchayati raj institutions.

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