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Wednesday, Apr 06, 2005

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National

New strategy to attract greater private investment

By Our Special Correspondent

NEW DELHI, APRIL 5. The Prime Minister, Manmohan Singh, has hinted that the UPA Government is set to further sweeten the policy and procedural environment to lure greater private investment to prop up the country's physical infrastructure, especially when the Centre's priorities and expenditure patterns have tilted towards social and rural infrastructure.

Initiating the discussions while chairing the full meeting of the Planning Commission here today to endorse the Mid-Term Appraisal (MTA) of the Tenth Plan, Dr. Singh said that for this to happen the Government would have to encourage the private sector to enter unfamiliar areas "through well-designed public-private partnership models." The MTA document brings out possibilities that exist for such involvement and the required policy changes, he said.

Dr. Singh noted that the slippages recorded in the growth rate of the economy, especially in agriculture, had wide-ranging implications for other important economic variables as well. Many of these problems were recognised in the National Common Minimum Programme (NCMP) and the Government had initiated corrective steps in some of the critical areas.

Seven priority areas

The Government, he said, had underlined seven priority areas for action, namely agriculture, water, education, health, employment, urban renewal and infrastructure. These sectors, each of which has been emphasised in the MTA, "are the foundations on which we hope to build the superstructure of a modern, fast growing, equitable economy," he said.

The MTA, in particular, indicates specific corrective steps needed in each of these areas, consistent with the strategy outlined in the NCMP. The corrective steps proposed are extensive and will inevitably spill over into the Eleventh Plan period, he said.

Raising a few issues of disparity, which concern the overall approach to planning as a process, Dr. Singh said that it was "important that as a country, we learn to walk on two legs, one embracing processes of high growth and the other addressing the issue of redistribution and balanced development. The former is essential to generate the resources for the latter. In order to accelerate growth, we need to put in place a set of policies that tap into the vast reservoir of talent that exists in our country, policies that will create an environment which reward creativity and enterprise."

"At the same time, while growth generates wealth, we also need to invest in equitable social and physical infrastructure, catering to the needs of marginalised sections of our society, to the regions which still need to catch up with the more advanced regions," he said. The Planning Commission, he said, must ensure that "our policies address both elements. The MTA deals with both aspect and we must continue to think innovatively on both fronts."

More reviews needed

Hinting at the need for more frequent reviews of the planning process, Dr. Singh said that while the benefits of a five-year planning process were apparent, it was not sufficient in a world driven by rapid technological change leading to rapid changes in consumer demand patterns and production opportunities. "Are five years sufficient for taking a long-term view on infrastructure development? Most of the creative discussions in a budget exercise focus on Plan expenditure. If so, is it essential to wait for five-year intervals to re-engage in a planning effort? Or can we do this on an annual basis for certain areas and on a longer basis for others?"

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