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'Finmin has the might to raise funds for Plan projects'
November, 08th 2006

Planning Commission deputy chairman Montek Singh Ahluwalia on Tuesday put the ball in finance ministry's court to organise adequate resources for funding all flagship programmes of the government during the Eleventh Plan period.

"We have high confidence in the finance ministry's ability to raise finances for the next plan," Mr Ahluwalia replied promptly when asked about ministry's reservations on maintaining high tax buoyancy during the next plan period on the sidelines of the Economic Editors' Conference.

In its comments on the approach of Eleventh Plan before a meeting of full Planning Commission, finance minister P Chidambaram suggested that maintaining tax buoyancy of 1.25% over a five-year period and a 12.5% annual growth in non-tax resources were difficult. The Plan document has assumed this level of buoyancy for maintaining an average growth of 9% during the Eleventh Plan.

While Mr Ahluwalia did not elaborate further on this, he said that number-crunching was still on before Eleventh Plan document was finalised and placed before the National Development Council (NDC) in December.

To another question, Mr Ahluwalia endorsed the human resource development ministry's stand for allocating 6% of GDP in the education sector and asked both the Centre and states to pool in more resources.

He, however, said that the HRD ministrys demand was nothing new and earlier the Kothari Committee too had asked for it. "The 6% figure is very old. It is a target which we still hope to achieve and want to do it as soon as possible," said Mr Ahluwalia adding that nothing has been finalised on the matter yet.

The deputy chairman said that the country needed $310bn investment in infrastructure sector to increase the baseline investment in the sector up from 4.7% of the GDP to 8%.

 
 
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