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More public investment in core sector

Our Bureau

NEW DELHI, Sep. 1

THE Prime Minister, Mr Atal Bihari Vajpayee, today declared that the nation is now poised to move decisively on the measures outlined by the approach paper to the Tenth Plan on the strength of ``our collective political will'' to achieve a higher economi c growth, and unveiled a slew of public investment programmes to kickstart the elusive revival of the economy.

Addressing the State Chief Ministers at the 49th National Development Council (NDC) here, the Prime Minister stated that the Centre and the State Governments should together take steps to end the crisis of investment -- both public and private -- that ha s risen in the economy. The Centre would accelerate large-scale public investments in infrastructure development.

Apart from the recent initiatives in highways and rural roads, the Government is resolved to set off long-pending reforms in the functioning of the Railways, Mr Vajpayee said adding that ``we shall soon flag off a major investment package for the early c ompletion of many critical and remunerative projects''.

From a bunch of 461 projects costing Rs 100 crore and more, which are at various stages of implementation for 10 years or more and being monitored by the Department of Programme Implementation, the Centre proposes to take up 100 projects, which could be completed in a short time, the Prime Minister said noting that the investments needed for this would be ``suitably provided for''.

Alongside, he said, the Centre would also identify a shelf of new bankable projects in the areas of irrigation, agricultural infrastructure, drinking water, urban infrastructure, State highways and district roads and bridge construction to accord additio nal fillip to the economy.

In the development of social sector, the key was to enhance the scope as well as the depth of public-private partnership in education, healthcare and sanitation, Mr Vajpayee said. He also cautioned that an excessive reliance on allocations to the neglect of performance has not served the country well and sought a re-orientation of executive accountability towards results.

Calling for making the Tenth Plan veritably a people's plan, the Prime Minister urged that together both the Centre and States should strive to set ``new standards of implementation, monitoring and follow-up''.

Without dissembling the current state of economy which was growing at a rate of slightly more than 5 per cent, Mr Vajpayee said that ``moving from this level to our Tenth Plan target of 8 per cent will require removal of the many policy, governance and i nfrastructural impediments to faster economic growth''. He cautioned that it would entail ``difficult decisions -- both by the Centre and the State Governments''.

Some of these decisions include increasing the revenue base by expanding tax collection, ending the losses of State enterprises and launching innovative ways of resource mobilisation, downsizing of the Government machinery, reduction in untargeted non-me rit subsidies, review of increasing food production based on periodic increase in procurement prices, labour reform, financial sector reform, more promotional measures to attract greater flow of FDI and FII investment on a stable basis.

The Prime Minister underscored the crying need for power sector reform and urged all States to implement the milestones within the accepted timeframe. ``If necessary, I am prepared to call an all-party meeting to build the necessary political consensus, so that the reforms are not derailed in States due to compulsions of competitive populism,'' Mr Vajpayee asserted.

He also called for removal of all perverse laws, regulations and procedures that lead to ``unproductive activities, increase cost and sap the energies of entrepreneurs''. Besides, delay in judicial system, effective disaster management plan, check in pop ulation, effective empowerment of Panchayati Raj institutions and a strong pro-poor focus to economic reforms must be expeditiously addressed, he said.

Earlier, in his presentation, the Deputy Chairman, Planning Commission, Mr K.C. Pant highlighted the deterioration in the fiscal situation of Centre and States in the 1990s. Even States with higher per capita income such as Maharashtra, Punjab and Haryan a have not done as well as Gujarat, Tamil Nadu, Karnataka and West Bengal in the 1990s in terms of growth rates. Madhya Pradesh, Rajasthan, Orissa and Bihar continue to lag behind, he said.

Mr Pant also highlighted as to how there has been a persistent decline in the ratio of Plan outlay to GDP both in the Centre and the States. The decline is sharper in the case of the Centre with the result that ``we are not investing enough for our futur e. Nor unfortunately, are we adequately maintaining our existing assets'', Mr Pant said.

Warning against the consequences of inaction ``as too serious to contemplate'', Mr Pant said the key to success includes changing Government dis-savings to surplus, raising budgetary support to the Plan from 4 to 4.5 per cent of GDP, improvement in Plan implementation, broadening and deepening agenda of reforms and marked improvement in governance- accountability, transparency and productivity.