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With economic conditions turning better compared to that three months ago, the Planning Commission has said economy should record at least 6.7 pc growth rate this fiscal, the same as was witnessed in 2008-09.
"What I can say is we should at least be aiming at the same growth as achieved last year and I think we could do a little better," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters in press a conference at New Delhi on Monday.
Last week he was reappointed as deputy chief of the Planning Commission.
Many people say 7 percent growth is not impossible this fiscal and some believes it could be better, he said.
Lots of it depends on how global economy behaves in the second half of this fiscal. Everybody expects that sharp downturn is coming to an end, but people are not sure how good a rebound we are going to see in the world economy, he said.
"So, I think there are some real uncertainties. But compared to three months back, the economic situation is much more favourable. Investors are certainly seeing it as such," Ahluwalia said.
The fact that we have strong mandate for stable government holds for the prospects of stable policies and we have seen some of that reflected in investment growth already, he added.
Ahluwalia also mentioned that international financial analysts were predicting 5 percent growth rate for last fiscal (2008-09), whereas actual expansion was 6.7 percent.
Plan panel in talks for hiking planned outlay for some sectors
With certain sectors still reeling under the impact of global financial meltdown, the Planning Commission has said it is discussing with the Finance Ministry whether planned outlay for some sectors could be raised in the Budget for 2009-10.
"What we are looking at is, is there a case for doing a little bit more (in plan expenditure) in some sectors," Planning Commission Deputy Chairman Montek Singh Ahluwalia said on Monday.
He said basically expenditure absorption capacity of different sectors are being looked at for making "some" recommendations.
"Obviously how much can be done depends on what you regard as a tolerable overall fiscal deficit, and that is one of the key issues being discussed with the Finance Ministry at this moment," Ahluwalia said.
The Planning Commission is in discussions with the Finance Ministry for an appropriate size of the plan expenditure in 2009-10.
"I should mention that interim budget already included significant increase over the previous year because of the stimulus that was introduced last year, so 2009-10 numbers are already substantially higher," he added.
However, Ahluwalia did not specify the sectors for which allocations could be raised.
Commerce and Industry Minister Anand Sharma had earlier said his ministry would take steps to provide more incentives for the industry and export-oriented sectors struggling with economic slowdown and would hold discussions with the Finance Ministry on suitable measures to be taken in the next Budget.
Sharma had said, "I will be discussing soon with the Finance Minister the measures which can be put in the Budget, which will help the Indian exports, particularly in the traditional sectors like handloom, textiles and leather."
The Centre has so far provided three stimulus packages to the slowing down industry by cutting excise duty by six percent, service tax by two percent and raising plan expenditure, besides giving other sector-specific steps.
The government's plan expenditure was revised upwards by around Rs 40,000 crore to Rs 2.82 lakh crore during 2008-09 in the interim budget. For this fiscal, plan expenditure is pegged at Rs 2.85 lakh crore.
As such, India's economy grew by 6.7 percent in 2008-09, more than expectations. However, manufacturing continued to contract in the fourth quarter of the fiscal.
Scope for raising funds by govt stake sale: Montek
The Planning Commission has said there is a lot of scope of fund raising by diluting the government's stake in unlisted public sector entities.
"So there can be really no objection, whatsoever, to disinvesting while retaining (the) government's stake up to 51 per cent... I think there is a lot of scope for raising resources (through disinvestment)," Planning Commission Deputy Chairman Montek Singh Ahluwalia said.
In her address to the joint session of Parliament last week, the President had talked about giving Indian citizens shares of public sector companies, while retaining the government's stake up to 51 percent.
"It is a very rational proposal and I would favour it. The commitment to retaining 51 per cent of the equity in the PSUs by the government," he said.
Ahluwalia said there may be some cases where companies itself prefer to raise funds from the market for expansion plans.
"So obviously you will take that into account so that (government plans to divest and companies' own plans to dilute government equity) two together do not dilute government stake below 51 per cent," he said.
On the proposed Food Security Act Ahluwalia said, the proposed legislation must deal with production, availability, price stabilisation of food products and assured supply of 25 kg of rice or wheat at Rs 3 per kg in a month.
"I have not seen the draft (of the bill) as yet. Food security has been a major concern, because there was shortage of food around the world and prices went up and everybody was really worried," he said.
Speaking on mid-term review of the plan he said, "Our objectives do not change, but clearly as part of the mid-term appraisal, we will look at whether the external environment, which we now face is temporary event."
He said the mid-term assessment of the XIth Five Year Plan would see whether there would be significantly different external environment for the rest of the Plan period.
"If so, what modifications are needed in the Plan, that is very much what mid-term review of Plan should really produce, I don't think we should pre-judge that. We will be doing very serious look at that in preparing mid-term appraisal, and i think that will feed into the next budget-- 2010-11," Ahluwalia said.
While, on providing smart cards to below poverty line for giving kerosene and LPG at subsidised prices, he said the government has decided to set up Universal Identity Authority.
"We are soon going to recruit someone to head it at the corporate level. The authority would start its operations. But it would take three to four years...," he added.
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Mr.Balamurugan Ranganathan15 November 2024
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