Plan Panel bogged down by OBC controversy

New Delhi, May 26 (UNI) The much-awaited Approach Paper to the Eleventh Plan is unlikely to be brought before the National Development Council (NDC) for approval before June end, having got bogged down over the controversy on methodology to ensure allocation of funds in proportion to caste representation.

The recent controversy on Reservation in higher educational institutions for Other Backward Classes (OBCs) has compelled the Commission to think about the political demand for dedicated allocation of funds for OBC dominated areas.

With the Forum of Scheduled Castes and Scheduled Tribe Members of Parliament having already drawn attention of the plan panel to the fact that 25 per cent of Budget allocations need to be made for the SC and ST segments of population, an influential group within the Commission is of the opinion that they cannot rule out representatives of OBCs demanding their share of the cake too.

They say that the Commission needs to undertake an analysis on the impact this will have on the development model of the Eleventh Plan if it is directed by the coalition government to earmark funds for development of the OBCs.

The Commission is deeply worried on this count as the bulk of resources in the Eleventh Plan were to be directed towards the flagship programmes of the UPA government, such as 'Bharat Nirman' and Urban Infrastructure Development Programmes.

Moreover, fund flows towards areas like irrigation, power and coal have to go up substantially during this period due to their dismal performance during the Tenth Plan period and almost certainly because the demand for these sectors has gone up manifold, they indicate.

Much larger allocations are also required for agriculture and to improve the performance of the manufacturing and services sector.

On confidentiality, the sources indicated that unless some extraordinary effort is made towards revenue generation, there would be paucity of funds for Centrally Sponsored Schemes (CSSs). The delicate balance of funds to various sectors would get further disturbed if they are required to ensure flow of funds towards protected communities, like SCs, STs and OBCs, especially those entailing mega programmes.

The Approach Paper, towards which Prime Minister Manmohan Singh had directed that it be completed before December 2005, has not even passed the first phase of approval. Dozens of Internal Planning Commission meetings have already been held but so far no consensus has been reached.

The next Plan is slated to begin on April 1, 2007, and normally after the Approach paper is cleared it takes about an year to complete the document. There is thus every likelihood that the document will be ready after the Plan period begins, sources said.

The Commission is also worried that allocation of funds dedicated to certain communities can create an adverse impression on investors pleased with policy interventions during the last two years to prop up private investment.

The global investor community of late had started looking at India more closely, thanks to the policy framework put in place and other parametres that would promote foreign investment. A shift in gear could be dissappointing to them.

Finance Minister P Chidambaram in his last Budget had made a concerted attempt to clear the cobwebs in the taxation structure, a long-standing demand of the business community. Coupled with this were efforts to give a boost to the infrastructure sectors, regarded as key to industrial development.

The investor community had taken a fancy to all this.

Not without reason India was the flavour of the season everywhere, including the World Economic Forum meetings at Davos.

The events in the political arena relating to the issue of reservation could create an impression that India is a country which moves a few steps forward and then takes some steps backwards, the experts argue.

But at the end of it all they see a silver lining. Given Planning Commission Deputy Chairman Montek Singh Ahluwalia's track record, he has a way about him to wade through troubled waters, they say, citing the foreign consultants controversy in this regard.

They are hopeful he will again manage the situation with dexterity -- pleasing investors as well as addressing the political compulsions.

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