I welcome you all to this full Planning Commission meeting today. We are meeting to consider the draft of the Tenth Five Year Plan.

The Tenth Plan, which is the first Five Year Plan of the new century, is an important milestone in India’s journey of planned development. The country has amassed a wealth of experience and learnt many useful lessons from this journey. Major changes have taken place in our national economy as well as in the global economy during the past five decades.

Planning in India is not a static concept. It is not enslaved by any dogma. It has to respond to the changing developmental needs of the nation. It has to take into account the dominant new trends in the national and global economies. The draft of the Tenth Plan reflects this dynamic quality, insofar as it has incorporated the rich experience of the past, and prepares us to face the challenges of the present and the future.

The biggest challenge before us is how to achieve speedier and more balanced development, so that India can leave behind the problems of the last century – namely, poverty and underdevelopment –- and march confidently to becoming a Developed Nation before the end of the second decade in this new century.

You will recall that, more than a year and a half ago, I had wondered whether the Indian economy could grow at a rate by which we would be able to double the per capita income of our people within ten years. I have always felt that our country has the potential, in terms of human, physical and natural resources, to perform substantially better than it has done in the past. I was unwilling to believe that it was not possible for us to achieve what other countries in our neighbourhood had done, sometimes with much lower endowments than ours.

I had directed the Planning Commission to examine the feasibility of attaining such acceleration in our growth rate and to outline the steps that would be necessary. Just over a year ago, the Approach Paper to the Tenth Plan was prepared, which clearly reaffirmed my belief in the immense hidden potential of our country. It indicated that it was indeed possible for the economy to achieve an 8 per cent average annual GDP growth during the Tenth Plan period, which could be further accelerated in the Eleventh Plan to attain a doubling of per capita income in ten years.

The Approach Paper also brought to the fore a serious lesson. It reminded us that our achievements on social and environmental indicators, which reflect the welfare of our people and the sustainability of our developmental process, were deficient. It made us realize that it was necessary to specify quantifiable and monitorable targets, towards which we could work collectively.

This was by no means an easy task. It required us to harness full political commitment on a wide range of reforms covering policies, procedures and institutions.

We went to the National Development Council with the Approach Paper and placed the issues before it without in any way glossing over the problems that could be encountered and the difficult decisions that would have to be taken. I regard the unanimous endorsement by the NDC of the 8 per cent growth target, and the extensive reform measures that would make it achievable, as a measure of the national resolve.

Since then, it is being widely realized that achieving an 8 per cent growth target is not merely desirable; it is inescapable if we are to meet the legitimate and long-unfulfilled aspirations of our people.

I am told that the rate of growth of our labour force during the coming years will be such that unless we achieve an over 8 per cent GDP growth, the rate of unemployment could rise further at the end of the Plan period. We simply cannot imagine such a situation, much less tolerate it.

We have made a solemn commitment to the youth of this country that our economy would generate one crore employment and self-employment opportunities each year. Our Plan and our policies must deliver on this promise. There are, therefore, compelling reasons for us to examine every conceivable way to accelerate the rate of growth and the pace of employment generation.

I am, of course, aware that in recent years our economy has not performed up to our expectations. There is even skepticism in some quarters: Is at all feasible for us to climb from a rate of growth of 5.5 per cent last year to 8 per cent in the Tenth Plan?

It is when the climb is steep that a good mountaineer musters his hidden strength and determination. Similarly, our nation has to prepare itself for the big challenges ahead of us.

Moreover, we have no choice. The issue before us is not whether we can achieve a significantly higher growth rate; rather, it is whether we can afford not to.

The answer is obvious: We cannot afford to set a lower growth target if we want to move towards our cherished dream of building an India free of poverty, illiteracy and homelessness, free of regional, social and gender disparities and with a modern physical and social infrastructure and effective conservation of our environment and natural resources that would help us achieve high Human Development levels; and, above all, if we want India to be capable of facing all possible challenges to her national security.

I wish to underscore once again that achieving these objectives will entail many difficult decisions. These simply cannot be avoided.

Tax reforms will have to be accelerated. We must quickly move towards an integrated Central and State Value Added Taxation system for goods and services.

Fiscal prudence, with all its attendant measures, will have to be pursued vigorously both by the Centre and State Governments.

We have to squeeze maximum efficiency and productivity from every rupee of investment already made. Specifically, we must utilize excess capacity effectively, upgrade existing capital assets, raise the knowledge and skill level of our workforce in all sectors; reduce public sector dissavings, and remove all non-financial barriers to speedier development. It is for this reason that we have to effect labour reforms, remove legal and other restrictions in the evolution of a national market, particularly for agriculture, and actively pursue disinvestment of our PSUs.

We have to adopt public-private partnerships in the widest possible range of activities in both physical and social infrastructure to leverage private sector resources for development.

Removal of the bottlenecks in our energy-transport-and-water infrastructure is a task that cannot be delayed any longer. I am deeply worried by the very slow pace of power sector reforms. One of the principal reasons why our current growth rate is stagnating at around 5.5% is due to severe infrastructural constraints, which can only be eased by accelerating reforms.

Our experience of over ten years of economic reforms has clearly shown that these cannot yield optimal results without concomitant governance reforms – reforms in our administrative system, judiciary and internal security system. In the economic sphere, the primary aim of these governance reforms will have to be greater encouragement to private entrepreneurship, with the government strengthening its role in the formulation and implementation of policies, legislation, regulation, and facilitation, and exiting from direct participation in production and distribution.

It is obvious that State Governments would have to extend their fullest and most enthusiastic cooperation to the Centre, if all these daunting tasks are to be accomplished.

It is also equally obvious that we have to effectively communicate the goals, strategies and tasks of the Tenth Plan to various constituencies of our diverse society, without whose support we cannot move ahead rapidly. We should generate enthusiasm about the Plan and its targets among our people. We can achieve these ambitious targets only when we are able to make Development a People’s Movement, and the Tenth Plan a People’s Plan. I seek the cooperation of all the political parties, social organizations, voluntary agencies and the media in this important endeavour.

Friends,

There is much debate these days on the content and direction of India’s development, as also on the policies and strategies that we should follow to realize our developmental goals. This is natural in a democracy; it is even desirable provided the debate is conducted in a constructive manner with a desire to promote consensus.

The draft Tenth Plan addresses the concerns voiced in this debate. For example, it has consciously adopted the path of Growth With Employment and Equity, not Jobless Growth that widens disparities. Accordingly, it lays much emphasis on speeding up the development of our agriculture, agro-industries, small-scale and cottage industries, and the whole array of activities in the informal sector. It stresses the need to increase the flow of credit to this sector through micro-finance and other measures. In addition, we must ensure that a range of legal impediments faced by the unorganised sector are quickly removed.

Another concern is about the role of Foreign Direct Investment. I would like to allay all apprehensions on this score. We have to achieve our developmental goals by our own efforts and primarily by harnessing our own resources. The draft Plan makes it very clear that the bulk of the vastly higher level of savings and investments needed to achieve the 8 per cent growth target would have to come from domestic sources.

However, we need greater inflow of FDI to supplement our domestic resources, in areas where it would strengthen our economy and enhance our competitiveness. We also need to increase our trade and technology cooperation with other countries. But let there be no worry in any quarter that we would follow such an FDI policy as would weaken Indian industry or hurt our national interests. This will never happen.

I congratulate the Deputy Chairman of the Planning Commission and his team for having laboured hard to flesh out the details of a plan of action, which would enable us to achieve our objectives. The draft Tenth Five Year Plan is now before us. It is a formidable document, reflecting the intellectual effort that has gone into its preparation.

I would request the Deputy Chairman to make a brief presentation of its salient features so that we can deliberate upon the strategy that is proposed and the specific suggestions that have been made.

At the end of this meeting, we shall formally adopt the Tenth Plan document.~