Consultations with Northern States, an acid test for Montek

New Delhi, July 2 (UNI) Planning Commission Deputy Chairman Montek Singh Ahluwalia's meeting with Chief Ministers of Northern States will be an acid test for the model of economic development for the Eleventh Plan evolved by the Commission as the political leaders of these States ars likely to make conflicting claims on policy issues, especially agricultural policy.

There are serious issues of policy where the interests of different states in the Northern Region come in conflict and Dr Ahluwalia will need to do a balancing trick to keep all satisfied, top sources in the Commission say. An instance in this regard is the special packages by the Centre to some States like Jammu and Kashmir.

Besides, the Chief Ministers of these States are likely to argue that adequate emphasis has not been paid in the Approach Paper to different aspects, for instance organic farming which is of immense interest to the hilly states, like Himachal Pradesh.

The focus of the discussions at the meeting in Vigyan Bhavan would be agriculture, as the biggest agricultural belt is in the Northern Region. Consequently, the emphasis would be on how to make it profitable.

The Approach paper has taken the route of improving agricultral profitability by shifting to demand-based agricultural production, as the thrust so far has been on the supply side.

The question of import of agricultural commodities-- primarily wheat and pulses so far-- is thus likely to figure prominently at the meeting.

The event is to be attended by the Chief Ministers of Harayana, Punjab, Jammu and Kashmir, Himachal Pradesh, Uttranchal and Delhi.

Another contentious issue is the provision of industrial incentives by certain State governments, which has been detrimental to the interest of some others. For instance, tax sops and other concessions by Himachal Pradesh has led to a flight of industry from the adjoining State of Punjab to the hill state. Besides, the non-avilability of level playing field to industries from Punjab has resulted in large-scale sickness and a disincentive for others to set up fresh capacities.

The Planning Commission is of the view that these incentives need to be phased out, if not eliminated with immediate effect.

Punjab and Harayana, the main wheat growing states, would press for market prices for the agricultural commodities. They would also make a case for a freer market in the farm sector, given the fact that major steps have been taken to liberate industry from the clutches of controls. A higher Minmum Support Price (MSP) for foodgrains hits the consumers but results in better terms of trade with industrial goods.

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