Cabinet approves 10th Five-Year Plan for economic growth

Tuesday, 29 October 2002, 08:00 Hrs
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NEW DELHI: The Indian cabinet Tuesday approved the country's 10th Five-Year Plan, 2002-07, targeting an eight percent annual growth rate through sweeping reforms.

The 7.06-trillion roadmap includes plans for divestment of public sector units and government downsizing.

The plan sets a target of raising 780 billion through divestment of government shares in state-owned companies, despite protests from a section of the ruling coalition that has opposed privatisation of blue-chip firms.

Approved earlier by the Planning Commission, the plan was announced against the backdrop of Prime Minister Atal Bihari Vajpayee charting out a firm reform agenda for his government to push up the annual growth rate from 5.5 to eight percent.

India's privatisation programme has been badly hampered by political squabbling within the multiparty ruling coalition. The government has repeatedly failed to raise the targeted revenue through sell-off of state-run enterprises.

A Planning Commission meeting chaired by Vajpayee on October 5 set out a roadmap for comprehensive labour and tax reforms to increase the contribution of tax receipts in overall economy output from 8.6 percent to 10.3 percent by 2007.

It also proposed to cut non-plan expenditure from 11.3 percent to nine percent of the gross domestic product (GDP).

The three-volume document seeks to generate 50 million jobs in the next five years and an increase in foreign investment to $7.5 billion annually, up from around $4 billion at present.

The plan has earmarked 6.7 trillion for states.

It also proposes a slew of measures to widen the tax net and improve collection. It favours the removal of tax incentives and concessions, downsizing the government and cuts in subsidies and administrative expenditure.

The plan document stresses strengthening local body institutions in villages and cities to enhance people's participation in the development process and help in good governance.

It emphasises reforming the revenue and judicial system, improving transparency and using IT for effective governance.
Source: IANS
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