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G. Srinivasan

`Given the relative weightage, it is reasonable to expect that a GDP of 5.2 to 5.5 per cent or closer to 5.2 per cent would be feasible for the current fiscal, which is not out of line with the projections of the RBI and CMIF.'

Mr N.K. Singh, Member, Planning Commission

NEW DELHI, Jan. 24

THE Plan panel is "hopeful of finding an appropriate and acceptable number for the gross budgetary support (GBS) for financing planned public programmes for the next fiscal, the inaugural year of the Tenth Plan," says Mr N.K. Singh, Member, Planning Commission.

Talking to Business Line here the day after parleys were held between the Deputy Chairman of the Planning Commission, Mr K.C. Pant, and the Union Finance Minister, Mr Yashwant Sinha, Mr Singh said the GBS for the next fiscal would be "consistent with the requirements of funding the important and priority areas of Plan along with the need for the Finance Ministry to continue to maintain fiscal rectitude."

He said the Plan panel had got the approval of the Finance Minister for the GBS and as per the Approach Paper of Tenth Plan, the GBS should be 4.5 per cent of GDP. "If the projections for the GDP for the next fiscal is 6.5 per cent, then the GBS would be Rs 1,30,000 crore which the Planning Commission has asked for," he said, adding that the Finance Ministry has so far suggested Rs 95,000 crore or so. He added that discussions would go on.

Mr Singh said the Plan panel has disagreed with the view that Central Ministries put up huge demands for the next fiscal, stating that in any case, many expansion programmes of development nature had been on. He said that the Union Power Minister has sought Rs 50,000 crore (Rs 25,000 crore from Plan and Rs 25,000 crore from borrowing) for revamping the distribution system and for improving the efficiency and financial viability of the State Electricity Boards.

There is also a large demand for continuation of the current road programme and under the Golden Quadrilateral, North-South corridors would be taken up next year.

Mr Singh said that there are also large requirements of funds for the Ministry of Rural Development for rural roads and development programmes. Besides, Human Resource Development Ministry has also initiated important social sector schemes and new schemes were also on the anvil, he said.

On the current year's GDP, he said the economy would log 5 to 5.5 per cent growth, which would emanate from growth of 6 to 7 per cent in agriculture, 7 to 8 per cent in services and 2 to 3 per cent in manufacturing sector. "Given the relative weightage, it is reasonable to expect that a GDP of 5.2 to 5.5 per cent or closer to 5.2 per cent would be feasible for the current fiscal, which is also not very much out of line with other projections from the RBI and CMIE," he added.

Asked about his optimistic projection of 6.5 per cent GDP for the next fiscal, Mr Singh said there are incipient signs of revival in manufacturing sector and "the sentiment is likely to be spurred by sound macro fundamentals in the economy and continued soft interest rate regime which the RBI Governor said he would continue in the medium-term. I, therefore, see that the manufacturing sector will look up and give a much higher growth rate than this year."

The services sector too will do well because of the expected economic recovery of the US this year. Even if the US begins a modest rebound, many areas of our new economy should really look up which should give further fillip to services sector'' to enable it to post 8-9 per cent growth next fiscal.

"So with the revival of the manufacturing sector and agriculture continuing to do well, I think 1-1.2 per cent growth over and above this year's level is not something which is unreasonable to expect," Mr Singh said.

Referring to the dismantling of administered pricing mechanism (APM) in the petroleum sector, Mr Singh who is in charge of energy in the Plan panel said that the Finance Ministry has scheduled to end it by April 1. Mr Singh said it is part of the process that "if subsidies are to be continued for kerosene and LPG, then the cost of these subsidies should be borne upfront by the Budget."

Mr Singh said that within the need for combining social commitment of the Government and the need to give subsidy for poor and middle class people along with the need to ensure that subsidies are properly utilised, "some acceptable solution" is being worked out between the Ministry of Finance and Ministry of Petroleum and Natural Gas.

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