8% growth impossible: PM

Projecting a 7-8 per cent growth in the next two years, Prime Minister Manmohan Singh on Monday asked states to chalk out ambitious plans to double farm production, which has been a drag in GDP performance.

The growth target for the tenth plan was set at 8.1 per cent and the mid-term appraisal shows that it has been averaging 6.5 per cent in the past three years, Singh said, adding the UPA government aims to achieve 7 to 8 per cent in the last two years of tenth plan 2005-07.

In an apparent attack on the NDA government, Singh told the national development council meeting that "even if we achieve this acceleration, we cannot achieve the original tenth plan target of 8 per cent over the plan period as a whole."

Noting that performance of agriculture has been disturbing in recent years, the Prime Minister said, "We must have the ambition to double our agriculture producting in ten years... I would urge the chief ministers to consider how the centre and states can cooperate in this area."

Perhaps an NDC sub-committee may be considered to work out the necessary steps for concrete action, he said.

Agriculture, which had grown at 3.2 per cent from 1980-96, had decelerated to 2.1 per cent during the ninth plan, needed to be tackled on several fronts to overcome the stagnation.

"We need to focus attention and increase investments in the entire chain of activities related to agriculture – the supply of inputs and credit, diversification of crops, better production practices and improved post harvest management," he said.

Turning to infrastructure, Singh touched upon two specific areas -- to overcome the power shortage that plagues almost all states and to ensure adequate power for a rapidly growing economy.

To create an environment for attracting public and private investments in the sector, Singh said financial health of electricity agencies needed to be improved by reducing transmission and distribution losses and by charging appropriate prices for quality power.

Singh said the mid-term appraisal emphasises the critical importance of this sector and the UPA government has given "high priority" to infrastructure development.

"In broad terms, we need to achieve a major expansion and upgradation in power, roads, railways, ports and airports and telecommunications connectivity," he said, adding this called for massive investments in these sectors in the remaining years of tenth plan and also in the eleventh plan.

Elaborating on the power sector, Singh said, "We should aim to bring down AT&C losses by 10 percentage points in two years with your (chief ministers) support and commitment. We need to focus on providing quality power at appropriate prices, taking into consideration the needs of consumers and health of electricity agencies."

On the issue of development of highways, the Prime Minister sought the help of state governments in checking unplanned roadside development, which "threatens to severely devalue and impair the road assets that are being created. I would urge you to pay special attention to this," he said.

On the difficult issue of financing the plan, he said the mid-term appraisal has drawn attention to the fact that total plan expenditure of the centre and the states in the first four years of the tenth plan was less than what it should have been if the targets were to be fully achieved.

Both the Centre and states' fiscal constraints have partly contributed to this, he said, adding the states have benefited this year with the significant increase in devolution, grants and debt restructuring on the basis of 12th finance commission recommendations.

The Twelfth finance commission has also brought about a major alternation in the manner in which states will have to manage their affairs, Singh said, adding, " I am of course aware that some of you (chief ministers) have apprehensions regarding the impact of these changes on the state finances."

"However, I believe that in the long run it will increase the flexibility of state governments and lead to a more healthy relationship between the centre and the states," he said.

On the farm sector, Singh said the cornerstone of the tenth plan strategy was a reversal of the declining trend in the growth rate of agriculture to achieve a growth of 4 per cent.

"Unfortunately, actual performance of agriculture appears to have deteriorated even further and will possibly not exceed as and adoption of the watershed approach in drought prone and wasteland areas.

Singh also announced that the government would launch an National Urban Renewal Mission for cities to realise its full potential and said the rural employment guarantee will not only provide minimum level of employment to poor but also help in creating assets.

On improving governance at district levels, Singh said it was necessary that civil servants should be entitled to a minimum security of tenure so that it can be judged whether they are equal to the tasks they have been assigned.

Singh voiced assured implementation of the ambitious Rs 1,7000 crore (Rs 170 billion) Bharat Nirman programme in four years. He also voiced his commitment towards improving health and education parameters.

Regarding the issue of gender bias, Singh said NDC was the right forum to pledge "our wholehearted and unequivocal support for ensuring a violence-free world for our women and girl children".

He said, "we need to place special emphasis on the education and nutrition of the girl child and to create conditions whereby every parent is enthused to send their daughter to school."

Expressing concern over the slow growth of the manufacturing sector, the Prime Minister said its performance on the whole remains much below the double-digit growth rate. He said it is possible and essential to enhance the growth rate in the sector to achieve growth and employment targets.