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September 1, 2001
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Money > PTI > Report September 1, 2001 |
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Tough decisions needed to push reforms, says PMHolding that both the Centre and states will have to go in for hard and unpopular decisions to achieve eight per cent growth in the Tenth Plan, Prime Minister Atal Bihari Vajpayee on Saturday unveiled a 14-point reform agenda that will give the topmost priority to reversing the economic slowdown. Weak finances of Centre and states, downsizing, power, labour and financial reforms will get urgent attention besides recovery of agricultural, industrial and services sectors, Vajpayee said, adding that the Tenth Plan will have 'strong pro-poor focus' to eliminate poverty. Highlighting the importance of 'good governance', Vajpayee told the National Development Council meeting here that there must be re-orientation of executive accountability towards results by laying stress on implementation and making the Tenth Plan a 'people's Plan'. Stressing there was 'no quick solution' to the economic problems the country was facing, Vajpayee said: "These will entail difficult decisions - both by the Centre and state governments." "We must have the courage and will to accept this challenge," he said. "We cannot afford to be complacent. Nor can we afford to make promises that we know we cannot fulfil without taking correct decisions, be they for the moment unpopular," he added. "The people expect us to act - expect me to act and they expect you (chief ministers) to act. They expect us to take such necessary decisions that will infuse confidence and impart a new momentum to the economy," he said. "Our citizens will support our actions if we properly explain what the situation is and how our decisions, while sometimes causing temporary hardships to some will ultimately benefit all," he asserted. Elaborating on the reform agenda, Vajpayee said the weak finances of both the Centre and the states need to be improved immediately. Unproductive and unnecessary expenditure will have to be drastically pruned. "Living on borrowed money and borrowed time is not a mark of good governance," he said. He added: "I cannot over-emphasise the importance of both the Centre and state governments to increase our revenues by expanding tax collection, ending the losses of state enterprises and launching innovative ways of resource mobilisation. Asserting that the downsizing of the government could not be delayed, Vajpayee said there are states whose salary bills alone far exceeded their revenue collections. Every unnecessary government job robbed the states of much needed resources for welfare and development activities and "the Centre will not be found wanting in this regard", he said. On the need to reduce untargetted non-merit subsidies, Vajpayee said there was a big need and a lot of scope for pruning them further and targeting them better to benefit the poor. "We need to comprehensively review our strategy of increasing food production based on periodically increasing procurement prices, he said adding another matter that deserves urgent attention is to increase the state's ability to lift low-price foodgrains for distribution to the poor and for Food for Work programme. The government will operationalise, within this month, the Sampoorna Rozgar Yojana to provide assured employment to the rural poor for building durable assets Vajpayee said appealing to states to cooperate in its implementation. Underlining the need to rejuvenate the power sector, Vajpayee said he was prepared to convene an all-party meeting to build the necessary political consensus so that the reforms are not derailed in states due to 'compulsions of competitive politics'. Asserting that labour reforms could not remain pending any longer, he said they were urgently needed to attract new investments. "I am happy that some states have begun to take positive steps in this direction." Emphasising that the health of banking and financial system was a matter of 'worry', Vajpayee said many economies have got into serious trouble because of the bad debts that led to the failure of their banks and financial institutions. "We have enough warning signals and much sobering experience to go by," he said adding that the government would accelerate reforms in the financial sector. Vajpayee also proposed taking promotional measures to ensure that foreign investment increased on a 'stable basis'. "Our agriculture, industry and services face many barriers to their rapid growth. These are in the form of harassment, corruption, red-tapism and other indignities of the Inspector Raj," he said. "We must quickly identify and eliminate, root and branch, all such perverse laws, regulations and procedures that lead to unproductive activities, increase costs and sap the energies of our entrepreneurs," he added. Vajpayee listed judicial reforms and long-term strategies to control droughts and floods, redoubling efforts to control growth of population and effective devolution of financial and administrative powers to Panchayati Raj institutions as some of the other areas which needed immediate attention. He said India needed a strong partnership between five agents of development -- Centre, state governments, Panchayati Raj institutions, private sector and non-governmental and community-based organisations -- to achieve all round development. "I believe one of the main reasons for the wide gap between India's developmental potential and her actual performance lies in insufficient appreciation in the planning process, of the need for a partnership between all the five drivers of national development," he said. "I am happy that the approach paper to the Tenth Plan seeks to correct this critical shortcomings," he said Admitting that the growth has currently slowed down, he said agricultural production, industrial production and exports have come down besides poor credit offtake due to drying up of investments. He blamed cyclical and episodic factors as well as structural weaknesses for the slowdown and told the chief ministers that "there is no easy or quick solution to the problems we are facing, especially since many of them are systemic in nature." "We must bear in mind that the slowdown has come at a time when legitimate aspirations of our people, especially those belonging to the poor and deprived sections of society are rising," Vajpayee said This could be fulfilled only if economic growth became faster, sustainable and more capable of removing regional, social and gender imbalances, he said. "To fulfil their hopes and aspirations is our common commitment, irrespective of the parties or coalitions we belong to. We cannot dilute this determination," he said. "We are today at a growth rate of slightly more than five per cent. Moving from this level to our Tenth Plan target (8 per cent) will require removal of many policy, governance and infrastructural impediments to faster economic growth," he said. Economic reforms had to be given a strong pro-poor focus and the Tenth Plan beginning next year should see a major progress in rural connectivity by road, telecom and the internet, primary education and health care and housing, drinking water and sanitation. In this connection he urged the state governments to quickly eliminate all laws and regulations which are used to harass the poor and deny them livelihood with dignity. To revive the economy, he reiterated that the Centre will accelerate large-scale public investments in infrastructure development. Vajpayee asked the chief ministers to take the cue from the Centre which has declared the coming year as the year of implementation, and do the same. PTI Following are the highlights of the reforms agenda laid down by Prime Minister Atal Bihari Vajpayee in his inaugural address at the 49th meeting of the National Development Council.
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