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Plan panel pegs growth at 6-6.5 per cent

By Our Special Correspondent

NEW DELHI, OCT. 29. The Planning Commission today indicated that the economy is expected to grow between 6 and 6.5 per cent in the current fiscal but the pace will pick up in the last two years of the Tenth Plan to rise to 7-8 per cent.

"In the current year, the economy is expected to grow between 6 and 6.5 per cent in 2004-05. It will take the growth in first three years of the Plan a little over six per cent. For the next two years we are aiming for 7-8 per cent growth which is achievable," the Planning Commission Deputy Chairman, Montek Singh Ahluwalia, said at the CII annual session.

However, he said, the annual growth targeted in the Tenth Plan would not be achieved because rapid acceleration of growth did not take place. Yet in the Eleventh Plan the economy would be well positioned for higher growth trajectory.

Noting that agriculture has to grow at the rate of four per cent per annum from 2.1-2.2 per cent currently for an eight per cent growth, he said this called for higher private and public investment in agriculture besides some policy changes since the investments had slipped in this sector over the last six to seven years.

Contract farming

Focusing on the need to accelerate the pace of projects to meet the irrigation needs, he said it would take 30 years to complete them if the work on existing irrigation projects continued with the pace it was progressing. Rural roads would require attention of the Government. Favouring policy changes to permit contract farming, Mr. Ahluwalia said the model that worked for increasing foodgrain production would not work in the case of vegetables and fruits.

Health and education needed more public expenditure even if these two areas were the responsibility of the States. Since the financial position of many of the States was not good, the Centre would have to chip in.

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