NDC Okays Plan; FM Assures States On VAT Compensation

New Delhi, December 21: | Updated: Dec 22 2002, 05:30am hrs
The National Development Council (NDC) on Saturday approved the 10th Plan envisaging a gross domestic product (GDP) growth rate of 8 per cent and decided to set up four empowered sub-committees to remove barriers to trade and investment and improve governance.

Prime Minister Atal Bihari Vajpayee with chief ministers AK Antony (Kerala), Ashok Gehlot (Rajasthan), Vilasrao Deshmukh (Maharashtra), Ajit Jogi (Chhattisgarh), Mufti Mohammad Sayeed (J&K) and Mayawati (Uttar Pradesh) at the 50th National Development Council meeting in New Delhi on Saturday
The NDC also accepted the proposal of Prime Minister Atal Bihari Vajpayee to formulate a priority agenda for action in the coming years. The time-bound implementation of the agenda would be monitored by the Cabinet committee on economic reforms and the committee of secretaries.

One of the empowered sub-committees will be headed by the Prime Minister. The committee will work towards removal of barriers to internal trade. The other committee, to be headed by the commerce minister, is aimed at creating an investor-friendly environment.

The Prime Minister also set up two sub-committees on financial and administrative empowerment of panchayati raj institutions and governance reforms.

Responding to the concerns raised by the states during the meeting regarding the implementation of value added tax system from April 1, 2003 finance minister Jaswant Singh promised that the Centre would fully compensate the states in the first year.

Mr Singh said the draft report on service tax would be sent to the empowered committee of state finance ministers shortly and might be introduced in the Budget session.

Earlier, in his inaugural address at the NDC meeting, Mr Vajpayee said while all over the world countries were coming together to create common economic space, the states in India continued to maintain and erect barriers.

Commenting on the ambitious growth target of 8 per cent for the 10th Plan period, Mr Vajpayee said there was no need to be skeptical by comparing the growth target with the 9th Plans 5.4 per cent growth. He pointed out that trends of revival were visible in many sectors and if the constraints in agriculture, industry and services were removed, the economy would attain a higher growth rate.

The Prime Minister expressed concern on the rising fiscal deficit both at the Central and state levels. We should ensure that the VAT regime is implemented in all the states from April 1 next. This will enhance revenues for the states.

He also said where subsidies did not fulfill their stated objectives, a firm roadmap for applying correctives in a time-bound manner should be put in place.

Talking to the press after the meeting, Planning Commission deputy chairman KC Pant said certain states had made concrete suggestions on tackling the problem of debt-overhang. We have taken note of the suggestions.