Budgetary exercise is an outmoded procedure: Pant

Following the finance ministry criticism of Plan process for debt-trap involving States, Planning Commission deputy chairman K.C. Pant on We...

Following the finance ministry criticism of Plan process for debt-trap involving States, Planning Commission deputy chairman K.C. Pant on Wednesday said the annual budgetary exercise is an ‘outmoded’ procedure responsible for inflexible fiscal policies.

Pant said greater flexibility in fiscal and monetary policies had become necessary to ensure that the economy is consistently maintained on the desirable growth path.

“While there has certainly been considerable improvement in the flexibility and sophistication of monetary and exchange rate management in the country, the same cannot be said about the conduct of fiscal policies, which remains rooted in outmoded budgetary procedures,” he said.

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Delivering the L.K. Jha Memorial Lecture Pant said the Tenth Plan therefore contained a detailed fiscal analysis, which would form the blue-print for a medium term fiscal strategy at both the Centre and the States.

Pant pointed out that the projections made for the Tenth Plan indicated that “even with optimistic assumptions, unemployment in the country, particularly among the youth, would continue to increase unless the growth rate of the economy was stepped up sharply and the sectoral pattern of growth was reoriented towards employment intensive activities.” Terming agriculture as the centre-piece of the development strategy, Pant said, “unless agriculture sector grows sufficiently fast, we face the spectre of growing unemployment.”