Put end to wasteful expenditure, fill resource gap: NDC

On the need for raising resources, Chidambaram said the Centre and states would have to garner resources from tax and non-tax sources. There was also the need to improve tax-GDP ratio for growth and fiscal consolidation.

The Centre and states must expand the tax base, rationalise the tax regime and improve tax administration, he said. All states should focus on effective implementation of a modern value added tax (VAT) regime to improve compliance and revenue gain.

Chidambaram said planned investments fell short of the Mid-Term Appraisal targets by 50 per cent in the first three years of the Tenth Plan. ‘‘We have to make up the balance 50 per cent in the remaining two years, that is 2005-06 and 2006-07, which is a tall order,’’ he said.

The FM advised states to contain unproductive expenditure and augment public investment. Chronically loss-making PSUs should be closed down or sold and subsidies needed to be rationalised to reduce inefficiencies for better targeting.

Meanwhile, asserting that a 7-8 per cent growth was within the realm of possibility, Prime Minister Manmohan Singh said the challenge before India was to combine the economics of growth with equity and social justice.

Singh, who was delivering the closing remarks at the NDC meet, said it is very much in the realm of possibility for India to become a prosperous nation and get rid of the ‘‘perennial scourges of poverty, ignorance and disease.’’ ‘‘The challenge before us is to combine the economics of growth with the economics of equity and social justice,’’ he said, adding India was now at a point where it can deliver growth at a rate of 7-8 per cent.