core sector communique

PM’s Opening Remarks at the Full Planning Commission Meeting

The Prime Minister, Dr. Manmohan Singh, addressed the Full Planning Commission meeting in New Delhi today. Following is the text of the Prime Minister’s opening remarks at the meeting:

"The draft Approach Paper that is before us reflects the directions that had been given during the last meeting of the Planning Commission and the important inputs that have been received from the consultation process. I will only touch on some of the key points which we need to consider carefully.

First, the Commission has examined the range of 9 to 9.5 percent growth which we asked it to consider. It has proposed that we should set the Twelfth Plan target at 9 percent. In fact the commission has pointed out that given the uncertainties in the global economy, and the challenges in the domestic economy even a 9 percent target is feasible only if we can take some difficult decisions.

The Commission has emphasized the importance of achieving 4 percent growth in agriculture both because it provides broad based income benefits to the rural population and also because it is necessary to avoid inflationary pressure which could arise if high levels of growth are attempted without corresponding growth in domestic food production capabilities. The Approach Paper outlines the multiple interventions necessary to achieve our agricultural growth objective. I am happy to inform members that although the Approach Paper talks of achieving 3% agricultural growth in the Eleventh Plan, the Deputy Chairman has informed me that the latest estimates suggest that this will be 3.3%.

The paper draws attention to the major flagship programmes which were instrumental for promoting inclusiveness in the Eleventh Plan. We are spending Rs.1,87,000 crores on these programmes in 2011-12. These programmes will continue in the Twelfth Plan, but as the paper rightly emphasizes, we need to focus on issues of implementation and governance to improve their effectiveness.

The Approach Paper points out that high growth requires supporting growth in energy and because domestic energy supplies are limited, our dependency on energy imports is likely to continue to go up. In this situation we have to take steps to reduce energy intensity of production processes and also to increase domestic energy supply as quickly as possible. Rational energy pricing will help achieve both objectives even though it may seem difficult to attempt.

The draft Approach Paper draws our attention to the rapidly increasing water stress that is being faced in various parts of the country. The total quantum of water available to the country is fixed. In order to ensure that we are not constrained by the availability of this precious natural resource we will have to focus our energies on evolving a holistic water management policy aiming at more efficient conservation of water and also in water use efficiency particularly in the field of agriculture.

Land acquisition has become highly controversial. The Approach Paper rightly argues that a new legislation is necessary, which strikes an appropriate balance between the need for fair compensation to those whose land is acquired and whose livelihood is disrupted, and the need to ensure that land acquisition does not become an impossible impediment to meeting our needs for infrastructure development, industrial expansion and urbanisation.

Health, Education and Skill Development were key areas of the strategy of inclusive development in the Eleventh Plan and they will continue to be focus areas in the Twelfth Plan. We must ensure that these sectors receive adequate resources. However, the effectiveness with which these resources are used is also critical. We need to ensure that resources provided are spent to achieve maximum efficiency in terms of outcomes. We also need to harness private investment in these areas.

Achieving 9 percent growth will require large investments in infrastructure sector development. The Approach Paper notes that we have been fairly successful in the eleventh Plan in using a combination of public investment and Public Private Partnerships for infrastructure development. We need to bring greater momentum to both these components so that present infrastructure shortages can be addressed in the shortest time available.

Finally, the Planning Commission has rightly endorsed the importance of the process of fiscal correction announced by the Finance Minister, even if this means that total resources available for the Plan in the short run will be limited. Resource limitations imply the need to prioritise carefully. Some priority areas, e.g., health, education and infrastructure will have to be funded more than others.

Faced with resource constraints we must also focus much more on efficient use of available resources. The Paper makes several suggestions in this regard, including giving implementing agencies greater amount of freedom , flexibility, promoting convergence between resources from different Plan schemes and the need for much greater attention to capacity building, monitoring and accountability. We need to engage the States on all these issues.

The Approach Paper has brought out the critical areas for the Twelfth Plan. I look forward to the views of Cabinet colleagues on these issues.

Let me begin by asking the Finance Minister to give us the benefit of his views."