Few fireworks at Economic Editors’ meet likely

The Planning Commission in its candid presentation of the state of economy before a meeting of full Commission on September 30 virtually admitted that Ninth Plan targets would not be met. The country needs 7.1 per cent GDP growth rate in 2000-02 to achieve the Ninth Plan target of 6.5 per cent GDP growth rate.

This, however, seems impossible. The Central Statistical Organisation (CSO) estimates of economic growth for the first quarter (April-June 2000) suggest that GDP growth rate decelerated to 5.8 per cent from 6.9 per cent recorded in the April-June 1999. The deceleration was witnessed in agriculture, forestry and fishing, manufacturing, construction and financing, insurance, real estate and business services. More recently, the Index of Industrial Production (IIP) for April-August 2000 also indicated a slowdown. The sectors which are not doing well include manufacturing, capital goods and consumer non-durables. The Reserve Bank of India too is not very optimistic and has projected a lower GDP growth during the current financial year.

The Planning Commission report card has also pointed out that average economic growth in the first three years of the Ninth Plan was 6.1 per cent as against 6.5 per cent in Eighth Plan and average growth of 6.3 per cent since 1991-92.

The CII data, analysis of the Institute of Economic Growth (IEG) and projections of Centre for Monitroring Indian Economy (CMIE) also indicate a slowdown. Also the international credit rating agency Standard and Poor’s has lowered India’s rating from positive to stable.

Sinha and his colleagues will be expected to explain the initiatives the government has taken or is proposing to arrest the economic slowdown and rectify the fiscal health of the nation, which according to Planning Commission, has deteriorated during the first three years of the Ninth Plan period.

The finance ministry woke up late, although the indications of slowdown became manifest earlier. Sinha last Monday held a meeting with the representatives of the chambers of commerce and industry to discuss the issue. It was decided at the meeting that the chambers would come out with their list of implementable propositions and help the ministry to formulate a strategy for combating economic slowdown. The chambers are expected to submit their proposals during the week which will include stepping up of public expenditure and expediting pending projects.