Plan panel eyes 6.5 pc growth for next fiscal

New Delhi, January 21: | Updated: Jan 22 2002, 05:30am hrs
The Planning Commission has planned to fix an economic growth target for the next fiscal at 6.5 per cent of the gross domestic product (GDP).

Speaking at the ‘India Energy Mart 2002’ conference here on Monday, NK Singh, member of the commission, said while the current fiscal was likely to end with a GDP growth of around 5.2 to 5.5 per cent, the GDP growth target in the next fiscal would not be less than 6.5 per cent.

He, however, said this was lower than the 8 per cent growth target fixed for the 10th Five Year Plan period.

“We have a very comfortable situation on the external front as far as foreign exchange reserves are concerned. Inflation is at an all time low. In the backdrop of these, the next fiscal will have a lot of room for financial maneuverability,” he added.

The interest rates are heading southwards, but banks are saddled with non-performing assets, Mr Singh said.

“We are debating if the asset reconstruction fund model of West can be adopted here,” he said.

Mr Singh said that the next financial year would see large foreign direct investment (FDI) in sectors like telecom, which had been completely deregulated.

“Roads too, have started looking up with the ambitious golden quadrilateral project, connecting Delhi, Mumbai, Chennai and Kolkatta, with four-lane highways on track to be completed by 2003. Contracts for construction of 4 to 6-lane highways on 5,600-km of golden quadrilateral have been awarded and balance of less than 400 km would be awarded this month,” he added.

Foreign investment would peak in road sector in 2003-07 when the 7,300 km North-South East-West corridors, connecting Srinagar with Kanyakumari and Silchar with Porbandar, would be on full swing, he said.

The current fiscal has seen a very strong revival of agriculture sector, while some segments of manufacturing sector have started looking up, he said.

In hydrocarbons sector, Mr Singh observed that issues like subsidies on kerosene and cooking gas (LPG) and level-playing field for private and public sector companies in a deregulated market from April 1, 2002 were to be resolved.

Situation in the power sector is worse with subsidies growing and financial performance of state electricity boards (Sebs) are deteriorating, he added.

“We are trying to address these issues in the integrated energy policy in the 10th Plan document which details various fuel options, energy scenario and opportunity cost of investing,” Mr Singh said.

Speaking on the occasion, power secretary AK Basu said the country had been facing 14-15 per cent of power shortage.

To meet the deficit, 33,000 mw new power generation projects have been identified for the Plan period (2002-07), he said, adding distribution reforms would be taken up on a massive scale in next 2-3 years.

“While private funds have not been very forthcoming in power sector, we plan to make up through increased public investment in both generation and distribution sectors,” Mr Basu added.