In a presentation on technical issues in the preparation of the Tenth Plan organised by the Asian Development Bank (ADB) in the Capital on Thursday, Planning Commission adviser Pronab Sen pointed out that the requirements for achieving the growth target of 8 per cent were stringent but not unachievable.
For maintaining fiscal deficit at the target level, tax buoyancy for the Centre during the Plan period has to be maintained at 1.2 per cent and for states at 1.5 per cent. It is necessary to ensure that subsidy doesnt increase as a percentage of GDP during the Plan period, Dr Sen said.
To put the economy on a high growth track by utilising the existing excess capacities, the required increase in investment has to initially come from the public sector, the Commission feels.
In the first three years of the Plan, public expenditure has to be as high as 11 per cent of the GDP, up from the present level of 4 per cent. In the last two years of the Plan, the conditions in the economy would be conducive for attracting private investment and the level of public investment could be decreased.
Dr Sen pointed out that the Plan had to guard against growing regional disparities as high growth rates resulted in rising disparities between states. Separate growth targets for states which had been introduced in the Tenth Plan would help in keeping a tab over individual states performance, Dr Sen said.