India to achieve double digit growth in XI plan: FM

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New Delhi, Dec 1: Finance Minister P Chidambaram today asserted that the government planned to get faster and inclusive growth during the Eleventh Plan period by giving major boost to agricultural production and industrial growth but cautioned against leakages and corruption in implemenation of various schemes.

Mr Chidambaram was replying to the debate on 'The Appropriation (No 4) Bill, 2007 and the Appropriation (No 5) Bill 2007 which was passed by the Rajya Sabha and returned to the Lok Sabha, which has already passed the Bills.

Asserting that opening of the economy has paid rich dividends for the country with growth rate increasing from below 5 per cent to about 9 per cent now, he welcomed the present discontent with even 9 per cent growth rate, saying the government planned to increase it to 10 per cent during the eleventh plan period. He, however, agreed with the members that certain sectors of economy needed regulators but said for that the economy needed to be opened to achieve high growth targets.

The Finance Minister, however, cautioned members that while holding the government accountable for any failure in implementing the policy of inclusive growth, they should not criticise the growth itself as increased economic growth only enables the government to provide more funds, grants and loans to states which could be used for providing drinking water, road and electricity to the people.

Economic growth at higher rate is generating larger income for more people who paid more taxes which the Centre shared with states and it was for the latter to apply this money to the people's welfar, he said.

Pointing out that the goal of double digit growth during the Eleventh Plan could not be achieved without raising the growth of the agriculture sector upto 3.6 per cent to 4 per cent, Mr Chidambaram said a number of schemes like the Rashtriya Krishi Vikas Yojna of Rs 25,000 crore has been launched along with the Food Security Mission.

The outlay for irrigation has been increased by the government, but the benefit was not reaching the people as most of the irrigation projects were being implemented by contractors, Mr Chidambaram pointed out and emphasised the need for involving people in implementing these projects. He also stressed the need for improving efficiency of implementation and reducing leakages and corruption in these irrigation projects. If the physical target of irrigation was achieved, the goal of 3.6 per cent to 4 per cent agricultural growth could be achieved, he said.

The Finance Minister said allocation for agricultural research and education has also been increased to Rs 2450 crore and it could be further enhinced.

Refuting the charge that the subsidy on PDS has been reduced, he said the quantity of foodgrain being subsidised under PDS has not been reduced neither issue price increased. The Food Corporation of India has reduced the subsidy bill by better efficiency in procurement. He said that 36.38 per cent of foodgrain issued under PDS was not reaching the intended target as 16.6 per cent was lost due to leakages due to ghost ration cards and 19.9 per cent at Ration shops. However, the fault was not of the Central government, but state governments were solely responsible for distribution of PDS foodgrains.

Regarding the demand for increase in the Minimum Support Price of paddy and wheat, he said the support price of paddy was fixed at Rs 100 more than the one recommended by CACP, an expert committee, while the MSP of wheat has been raised to Rs 1000 per quintal.

Rejecting the members' demand for abolition of service tax, he said service sector constitute 54 per cent of economy so it could not escape tax. He said that from April 1, 2010 GST or Goods and Service Tax, which would be a combination of excise duty and service tax, would be implemented.

However, relief would be given to the sectors needing protection like agricultural handtools, exporters and small scale industries.

Food and fertilizer would also be subsidised, he said but admitted that all subsidies must be revisited periodically.

Regarding students not getting education loans, the Finance Minister said the number of students receiving education loans have increased to over 10 lakh now. He said that he would personally see that no deserving student was denied education loan in the country.

Following the Finance Minister's assurances, the House passed the Appropriation Bills by voice vote and returned it to the Lok Sabha.


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