New Delhi, Nov 8 (UNI) The meeting of the Full Planning Commission here today approved the Eleventh Plan Document with Planning Commission Deputy Chairman Montek Singh Ahluwalia warning that the hidden subsidies of the oil sector can send the Eleventh Plan targets hay wire.
''The Plan document was made on the assumption of global oil prices being at 80 dollars a barrel. But these prices today are hovering at 98 dollars a barrel, which involves a huge hidden subsidy. If this is not corrected then the ambitious targets outlined in the Plan document may not be achieved,'' Dr Ahuwalia said addressing a press conference after the Plan Panel meeting.
The agenda before the meeting was approval of the Plan, which aims to achieve a nine per cent average growth rate during the plan period with inclusiveness.
The meeting, chaired by Prime Minister Manmohan Singh, mandated the Commission to incorporate the views expressed by the Ministers in the document.
Dr Ahluwalia said the Commission will bring out a ''revised and better document'', which will go before the Cabinet in seven to 10 days time.
He said the meeting mandated that it be brought before the NDC in December, which will put its seal of approval. The Plan document has been delayed by more than a year and the Prime Minister had desired that it be completed at the earliest.
Dr Ahluwalia clarified that the date of holding the NDC meeting has not been finalised.
The Prime Minister in his introductory remarks had also stressed the need for rationalisation of food, fertiliser and petroleum subsidies, which he said stood at Rs one lakh crore.
Dr Ahluwalia said there was considerable discussion at the meeting on the sectors for which allocations had been substantially hiked, namely, agriculture, rural development, education, health and socal empowerment.
As a result of this, the Budgetary resources for the infrastructure sector would go down from 10.2 per cent to 8.4 per cent. This reduction would be met through internal resource generation of the public sector companies in the field as also enabling them to raise monies through the market.
Dr Ahluwalia said oil companies have taken a hit by absorbing the global hike in crude prices. ''They are already on the ground,'' he remarked.
He said this in the long-term was not sustainable. ''If the situation is not corrected then the enhanced allocations to these various sectors whose allocations have been increased will not be happen.'' Dr Ahluwalia's remarks as also the Prime Ministers statement are a clear indication that the government will increase the prices of petroleum and diesel sooner or later.
The document says, ''The present policy of insulating consumers from global price is not sustainabe as the public sector oil majors bear a large brunt of it. If the global price is passed on fully to the consumers, it would reduce demand for oil, raise prices all round and lower growth rate of the economy.
On the other hand , if the price rise is absored by lowering taxes, it would put burden on government tax revenue. If left uncovered it wil increase fiscal defcit with its consequences.
A 25 per cent increase in oil price from 80 dollars a barrel can be expected to increase our import bill by five per cent. This will increase the Current Account Deficit to GDP ratio by less than one percentage point.'' Eds here picking up from Opening para of DI xxx With a 4.1 per cent hike in the Centre's and States' Budgetary resources xxxx UNI