EXECUTIVE SUMMARY
Chapter 1
STATE OF THE ECONOMY AND ECONOMIC REFORMS 1.1. The set-backs suffered by the economy in 1990-91 and 1991-92 were taken into account while formulating the Eighth Plan. Thus the growth target (5.6 per cent p.a.) and the mac- roeconomic parameters were set at relatively conservative levels. A step up in the invest- ment rate was considered necessary for attain- ing full-employment by 2002.
1.2. The average annual rate of growth of the GDP, which was 5.63 per cent per annum during 1980-1991, came down to 4.6 per cent for the first three years of the Eighth Plan (1992-95). If the Plan target is to be achieved, a growth rate of 7.1 per cent is required in the remaining two years.
1.3. The growth of the manufacturing sector has been 4.7 per cent during 1992-95 as com- pared to the Plan target of 7.3 per cent. How- ever, agriculture growth has been more than satisfactory at about 3.7 per cent as compared to the targetted 3.1 per cent. Communications and Financial sectors have clearly performed better.
1.4. The current account deficit, which was about $10 billion in 1990-91, has come down to less than a billion dollars in 1993-94 and 1994-95. There has also been a surge in capital inflows in recent years. Total foreign invest- ment hits gone up substantially in 1993 -94 and 1994-95. Most of this is accounted for by portfolio investments.
1.5. Import growth averaged about 14 per cent per annum during the Plan as compared to the target of 8.4 per cent. The growth in exports has been slower at 13.4 per cent, but in the last two years it has picked up to average 18.5 pre cent. Such rates of growth will have to be sustained if the external debt is to be reduced while maintaining reasonable growth of GDP.
1.6. There has not been as yet a marked change in the composition of commodities or of mar- kets which would indicate a structural change in our export sector.
1.7. The economy has pulled out of the reces- sion, and the real effective exchange rate of the rupee has started to appreciate , both of which will tend to lead to a slowing down of export growth unless new export capacities are cre- ated rapidly.
1.8. An analysis of the level of export incen- tives, degree of import protection and the rela- tive position of exports and import substitutes suggests that these measures are not substan- tially better now than in 1966-67, when India was not an export-oriented economy.
1.9. India's export growth will have to be based on improved productivity and product and market diversification, but an active ex- change rate policy may be inescapable in the short run. The export regime should be made more "user friendly". Attention has to be paid to rapidly expanding export infrastructure, which is already a constraint.
1.10. The exchange rate has become central to management of the external sector due to re- duction in other forms of trade intervention. The large inflow of foreign portfolio invest- ments has put a strong upward pressure on the real exchange rate, which has appreciated in the past two years.
1.11. The most worrisome feature of foreign portfolio investments, is that it tends to behave pro-cyclically. It may therefore be necessary to maintain some amount of control at the initial stage of our reform process.
1.12. No stabilisation effort can be sustained unless the revenue deficit is brought down to
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reasonable levels and contained. The main phi- losophy guiding tax reforms was to have mod- erate and rationalised rates on a wider base and to ensure better tax administration. The ap- proach appears to have paid dividends.
1.13. Government expenditures have declined by 2 percent of GDP, mostly on account of capital expenditures, but interest payments have risen by 0.6 percentage points.
1.14. The rapid increase in interest payments is a result of rising interest rates on new debt and the decision to reduce money finance of the fiscal deficit to accomodate foreign portfo- lio investments.
1. 15. The average inflation rate in the period 1991-95 is higher than in the pre-reform pe- riod. Food prices have increased at a faster pace than prices in general; the principal cause being upward revision in the administered prices of food-grains.
1. 16. The inflationary pattern in 1994-95 sug- gests that shortages tend to develop in certain sectors with rapid growth in incomes. These need to be identified and corrective steps taken.
1.17. Employment has grown at 2.03 per cent per annum for 1992-95, which is lower than the Eighth Plan target of 2.6 to 2.8 per cent. 48 per cent is accounted for by the agricultural sector which grew faster than the Plan target. For the future, measures to ensure the sustain- ability of agricultural employment need to be implemented.
1.18. Poverty estimates from the NSS "thin" rounds indicate a reduction in poverty since 1987-88. The importance of agriculture to both employment creation and poverty reduction underscores the need to accelerate agricultural growth.
1.19. Regional disparities may have widened even further. Three States - Bihar, Uttar Pradesh and Madhya Pradesh - experienced a sharper deceleration in growth than the na- tional average. Distribution of organised sec- tor credit and extent of Plan investments have also worsened.
1.20. The rate of capital formation, particularly by the private sector, has declined sharply by 2 percent of GDP. The inflow of foreign direct investments (FDI) also have not entirely lived up to expectations.
1.21. The decline in government investments of 1.7 per cent of GDP has serious implications for the critical infrastructure sectors. While greater private sector participation in infra- structural development is the right direction to follow in the long-run, too much progress can- not be expected immediately due to legislative and procedural changes required.
1.22. The domestic savings rate has declined due primarily to a sharp reduction in house- hold savings. Public savings had improved significantly but received a set-back in 1993- 94. Corporate savings has grown steadily. Real foreign savings has averaged only 0.8 per cent of GDP, but the flow of financial savings have been much higher at 2.4 per cent. If these excess financial savings have to be absorbed, public investments have to be raised in the short-run.
Chapter 2
RESOURCES POSITION 2.1. The Eighth Five Year Plan (1992-97) was launched in the context of a serious fiscal crisis. The economic reform programme initi- ated in July, 1991 sought to augment tax reve- nues via a comprehensive process of tax reform while recognising the need to compress non plan revenue expenditure. The resource mobilisation exercise for the Eighth Plan was carried out keeping in view the broad objec- tives of the Plan which regarded human de- velopment' to be at the core of all development efforts.
2.2. The public sector outlay for the Eighth Plan was placed at Rs.434100 crores at 1991- 92 prices. The share of States in the public sector Plan outlay has been going down from the Fifth Plan onwards.
2.3. There is a shortfall of about 7% in the overall approved Plan outlay during 1992-95. The shortfall is particularly marked in the al- locations for the State sector. There are also serious shortfalls in the infrastructure and so- cial sectors.
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2.4. In regard to other sectors, too, shortfalls in Plan expenditure are noticed in the case of both the Centre and the States. Some of these are Agriculture, and Allied Activities, Irrigation and Flood Control, among others
2.5. In terms of the projected financing pattern for the Eighth Plan, Balance from Current Revenue (BCR), resources of public enter- prises and borrowings account for 88.8% of the total approved outlay. BCR has been in the negative region for the three year period 1992- 95. As for Central PSEs, as against a target of 43.3 per cent they contributed only 31.3 per cent of the aggregate resources during 1992- 95. State level PSEs were expected to contrib- ute only 3.9% of States' aggregate resources.
2.6. There has been much higher dependance on borrowings and miscellaneous capital re- ceipts (MCR) by both Centre and States.
2.7. Budgetary support is a crucial factor in the determination of outlays of sectors which do not have any access to internal resources of borrowings. Bulk of the budgetary support goes to the social sector, followed by the infra- structure sector. The infrastructure sectors with significant amount of budgetary support are power railways, surface transport and coal.
2.8. In assessing the resource availability ques- tion for the terminal year of the Plan, i.e. 1996- 97, tax revenues in respect of the four major central taxes, viz personal income tax, corpo- ration tax, union excise and customs duties, have been forecast making use of buoyancy estimates. Assuming fiscal deficits of 5.1% and 5.5% of GDP the extent of Central budg- etary support available for the Annual Plan of 1996-97 are forecast to be in the range of Rs.50988 crores to Rs.63561 crores respec- tively.
2.9. Increased resort to borrowing at market rates of interest has led to substantial increase in interest payments.
2.10. As against the Eighth Plan target of an average savings ratio of 21.6% the gross sav- ings ratios in 1992-93 and 1993-94 were much lower at 20% and 20.2% respectively. There has been an increase in the dissaving of the Government.
2.11. Resource mobilisation at the State level was far short of the projections for the Eighth Plan. Substantial shortfalls were noticed in the BCR and contributions of State level public enterprises.
2.12. The performance of the States presents a varied picture. Only Maharashtra and Arun- achal Pradesh could mobilise more than 60% of the resource during 1992-95.
2.13. At current projections of resource mobi- lisation a resource gap at the States' level of Rs.37,000 crores to Rs.43,500 crores is likely to emerge.
2.14. Overall, significant shortfall is observed in respect of BCR and contribution of PSUs, leading to substantially large reliance on bor- rowings and miscellaneous capital receipts There are serious shortfalls in outlay particu- larly in the infrastructure and social sectors There is need to explore avenues for revenue augmentation and compression in respect of non plan expenditure, so as to allocate re- sources for the badly deficient social and eco- nomic infrastructure.
2.15. After careful examination of the re- sources position both from the points of view of additional tax and non tax revenue moblisa- tion as well as expenditure compression it is seen that an amount of Rs.60000 crores should be feasible as the Central budgetary support for the terminal year (1996-97) of the Eighth Plan.
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Chapter 3
EMPLOYMENT AND POVERTY ALLEVIATION 3.1. The Eighth Plan envisaged creation of additional employment opportunities of the order of 426 lakhs during the plan period on the assumption that the economy would grow at the rate 5.6 per cent per annum and the employment intensity of growth would be 0.47. An assessment of the performance of the economy in the first three years of the Plan shows that the economy has grown at the rate of only 4.6 per cent per annum but that, there has, been a shift in the composition of growth in favour of employment-intensive sectors and sub-sectors during this period compared to the eighties. As a result, employment has grown at an average annual rate of 2.03 per cent during this period or 63 lakhs per annum compared to a rate of growth of 1.78 per cent or 5 0 lakh per annum, during the period 1985-92. But this rate of employment growth falls short of the rate of growth of 2.7 per cent or 85 lakh addi- tional employment opportunities per annum envisaged in the Plan. Consequently, open un- employment has increased from 1.70 crore at the beginning of the Plan to 1.87 crore by the end of 1994-95.
3.2. Employment growth needs to average at 3.64 percent per annum and, therefore, the rate of growth of the economy at 7.3 per cent per annum during the last two years of the Plan. 3.3. Assessments and forecasts by various or- ganisations indicate rates of growth of the economy between 5% & 7%. These would imply a modest scenario of the Plan being able to absorb the net additions to labour force in employment by 2002, however, appear feasible able to reduce the backlog by about 50 lakh. Prospects of achieving the goal of near full employment by 2002 however, appear feasi- ble through enhancement of public investment in agriculture, especially strengthening irriga- tion and other rural infrastructure in backward areas, expansion and diversification of rural non-farm sector activities and the small scale sector and faster growth of other employment- intensive sectors like construction, transport, hotels and restaurants and incentives for pri- vate investment in housing. Foreign direct in- vestment and domestic investment much of which are In core industries like infrastructure and capital goods industries, would also lead to substantial indirect employment in the econ- omy.
3.4. An analysis based on the relationship be- tween incidence of poverty and availability of foodgrains shows that the incidence is likely to have declined from levels observed in 1991- 92.
3.5. The scope and content of Special Employ- ment Programmes has been considerably im- proved. Annual outlays have been enhanced considerably in the first three years of the Eighth Plan. Several new initiatives have been taken including the introduction of the Inten- sified JRY in 120 identified backward districts and Employment Assurance Scheme covering 2446 blocks. These have led to substantial increase in the flow of funds to backward areas characterised by a high degree of poverty and underemployment. Under IRDP the major thrust has been on increasing the per capita investment and strengthening of the infrastruc- ture and linkages in order to make the scheme economically viable. The focus has been shifted towards convergence of various pov- erty alleviation programmes with area devel- opment programmes and the sectoral schemes with the objective of building rural infrastruc- ture for more sustained employment.
3.6. Decentralised planning has been given a tremendous impetus by the enactment of the 73rd and 74th Constitutional Ammendment Acts. State Governments/Union Territories have enacted appropriate legislations and it is expected that the elected bodies will be ill place by the end of the year. However, in order to make them effective units of local self-gov- ernment adequate powers and funds would have to be transferred to them. Furthermore the role of voluntary agencies is expected to increase in the rural development sector and steps to facilitate this have been initiated by the Government.
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Chapter 4
SOCIAL INFRASTRUCTURE 4.1 Social development is the ultimate of all development and, therefore, a goal in itself. It also helps in creating a supportive environ- ment for Economic Growth. Since it is difficult to adopt a 'norm-based' approach for Social Infrastructure, a Minimum Needs approach is adopted.
4.2 The Indicators of Social development have shown an improvement over the years, as can be seen from the Table of selected indicators given below:
Indicators of Social Development
1951 1981 1991
1. Crude Birth Rate (per 1000) 41.7 33.9 29.5
2. Crude Death Rate (per 1000) 22.8 12.5 9.8
3. Infant Mortality Rate (per 1000) 146.0 110.0 80.0
4. Life expectancy at birth (years) 32.1 52.3 60.8
5. Literacy rate Total 18.33 43.56 52.11
Male 27.16 56.37 63.86
Female 8.86 29.75 39.42
4.3 Despite improvement in indicators of so- cial development, India lags behind in com- parison to most of the developing countries. Large differences exist within the country also. Crude Birth Rate in 1991 was 18.3 per 1000 in Kerala (lowest) against 3 5.8 per 1000 in Mad- hya Pradesh (highest). Similarly, Female Lit- eracy rate in 1991 was 20.80 per cent in Madhya Pradesh (lowest) against 86.90 in Kerala (highest). While 82.31 per cent of households in Punjab in 1991 (highest) had electricity in their homes, only 12.57 percent (lowest) of households in Bihar had electricity.
4.4 Given the low levels of indicators of hu- man development, large differentials across states, large variations between rural and urban areas, gender disparities, and wide gaps be- tween the need and the availability of social infrastructure in this country, the government has to play a key role in the provision and maintenance of social infrastructure. Private investment in provision of social infastructure is of a small magnitude and is restricted to areas which yield returns on investment.
Plan Outlay 4.5 The Eighth plan outlay for social services was fixed at Rs.79,012 crores. Plan outlay for social infrastructure was targetted to increase from 16 percent in the Seventh plan to 18.2 percent in the Eighth plan. However, in the first three years of Eighth plan, the plan allo- cation for social sectors has declined to below 16 percent. Constraint of budgetary resources, is the reason for this decline in the recent years.
4.6 In the first three years of the Eighth plan, outlay for social infrastructure has been 46 percent of the Eighth plan provision against 55 percent for other sectors. The gap between the first three year's allocation for social infra- structure in relation to the plan's outlay and other sectors has been wider in the central plan when compared to the State's plan. This is due to a larger allocation for economic infrastruc- ture by the centre.
Health 4.7 There have been shortfalls in the achievment of setting up of Primary Health Care Infrastructure. Though, there is all at- tempt during the Eighth plan to strengthen the existing infrastructure for Primary Health Care, shortage of paramedical personnel is noticed.
4.8 Communicable diseases like Malaria, Lep- rosy, Tuberculosis, AIDS, etc., continue to be cause for concern and are tackled through Cen- trally Sponsored Programmes. Because of an increase in life expectancy, there is an increase in the prevalence of non-communicable dis- cases like Diabetes mellitus, Cardiovascular diseases, Cancers, Cataract, Hearing impair-
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ment, Arthritis amongst the elderly persons. Efforts are also on to promote the Indian Sys- tem of Medicine and Homeopathy which are widely accepted in the country, and practitio- ners belonging to these systems are available and provide health care at affordable costs in rural areas.
Family Welfare 4.9 Large disparities across states prevail in fertility rates. During the first two years of the Plan, there has been a progressive increase in the number of couples using sterlisation for contraception. For the distribution of revers- ible methods of contraception -IUD, OC and condoms, strategy of social marketing has been adopted. Maternal and Child Health Pro- grammes are an important part of Family Wel- fare Programmes and help to reduce maternal, infant and child mortality rates.
Housing and Urban Development 4.10 The National Housing Policy envisages shift in Government's role to act more as a facilitator than as a provider. The needs of the vulnerable sections will continue to be taken care of by the Government. As a facilitator government aims at providing basic infrastruc- ture, flow of finance, removal of bottlenecks from legal and regulatory framework, etc,.
4.11 Increase in urban population has created problems of congestion, pollution and deterio- ration in civic services. Poverty in urban areas is also at high levels. The scheme of environ- mental improvement of urban slums aims at ameliorating the living conditions of urban slum dwellers and envisages provision of drinking water, drainage, widening and paving of existing lanes, street lighting and other com- munity services. Some Centrally sponsored schemes are under implementation to take care of other urban problems.
Water Supply and Sanitation 4.12 The recent survey of 1991-94 conducted by the State Government has revealed that the dimension of the problem of rural water supply is much larger than what has been visualised in the Eighth plan. At the time of formulation of Eighth plan, it was estimated that besides 3,000 spill-over problem villages, there were about 1.5 lakh `partially coverd' villages/ habitations requiring augmentations whereas, as per the said survey there has been a re-emer- gence of as large is 1.4 lakh 'no-source' vil- lages/habitations in addition to 3.67 lakh 'par- tially covered' villages/ habitations.
Literacy and Education 4.13 Enrolment figures at the elementary stage, are not commensurate with targets dur- ing the first two years of the Plan. More allo- cations to education particularly to elementary sector have to be provided. The problem of dropouts is being tackled through incentive schemes of midday meal, etc,. In Adult Edu- cation apart from emphasis on enrolment, there are efforts for sustainability of literacy skills. To improve quality of secondary educa- tion, Navodaya Vidyalayas are being set up in more districts, and facilities in Kendriya Vidy- alayas are being upgraded.
4.14 For improvement of Science Education there is a scheme of central assistance for science kits, upgradation of science laborato- ries, supply of science related literature, etc,. Quality of Vocational Education is a cause of concern. With a statutory status, the All India Council For Technical Education is in a posi- tion to activate a proper planned and coordi- nated development of technical education in the country. Mission mode in Industry- Insti- tution interface and financial self reliance have been emphasised in the technical and higher education, but results are yet to be seen.
4.15 Schemes for the promotion of Culture like award of scholarships and fellowships to art- ists in the field of performing, literary and plastic arts have exceeded the Eighth plan pro- visions. The scheme of Nehru Yuvak Kendras aims at providing the rural and non-student youth with opportunity to take part in the proc- ess of National Development, as also to de- velop their own personality and skills.
Minimum Needs Programme 4.16 MNP spending as a percentage of total plan outlay has been declining over the years.
Welfare of Select Social Groups 4.17 There are shortfalls in the liberation and rehabilitation of Scavengers under the Na- tional Scheme for Liberation of Scavengers. Achievment under the post matric scholarship for SC/ST has been good. National Minorities Development and Finance Corporation has been set up with an authorised capital of Rs.500 crores. Mahila Samridhi Yojana has been launched to encourage savings amongst rural adult women.
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Information and Broadcasting 4.18 The thrust of the Eighth Plan for Informa- tion and Broadcasting sector is on bringing about a qualitative change in broadcasting services, expansion of coverage especially in remote areas and modernisation of informa- tion and publicity media. The strategy includes functional autonomy of the electronic media and making it self-supporting at least for the Plan investment. The performance of AIR in achieving the physical targets in the three ma- jor areas of setting up of broadcasting centres, radio transmitters and studios fixed for the Eighth Plan has been satisfactory during the first three years of the Plan. The performance in the case of Doordarshan has, however, not been satisfactory, in respect of Programme Generation Facility (PGF) Centres and High Powered Transmitters.
4.19 Due to stif competition being faced from foreign TV channels, any substantial 'increase in the revenue from the existing level would be difficult for Doordarshan unless it adopts an innovative strategy to counter the challenge. The Non- Lapsable Fund (NLF) created as a repository of revenue generated by AIR and Doordarshan has been the main source of fi- nancing Plan investment. Withdrawals from this fund need not be restricted to the net accruals during a year. The Press Information Bureau (PIB) needs to be modernised and de- veloped as a state-of-the-art media centre.
Chapter 5
AGRICULTURE AND ALLIED ACTIVITIES
Section 1: AGRICULTURE
Thrust Areas 5.1 Major thrust areas identified for agricul- tural development amongst others are acceler- ated growth in areas which have relatively lower growth, development of rainfed areas, diversification of agriculture, inputs manage- ment, enhanced agricultural exports, market- ing infrastructure, development of resources in agro-climatic zones, etc.
Agricultural Production Performance 5.2 The first three years of 8th Plan have been marked by fairly consistent level of foodgrains production in the range of 180.00 to 185.00 million tonnes with the production reaching a new peak of about 186.35 million tonnes in 1994-95. The incremental production has not kept pace with the targets set for the 8th Plan. Record of production of oilseeds, sugarcane and cotton were also achieved in 1994-95. The production of pulses show a gradual increase from 1992-93 to 1993-94 with a production level of 14.33 million tonnes in 1994-95. There has been improvement in the productiv- ity levels of agricultural crops excepting wheat, coarse cereals, cotton and sugar- cane From the trend in the foodgrains produc- tion, there is likely to be a shortfall for about 9-10 million tonnes in 1996-97 compared to the Eighth Plan target of 210 million tonnes.
5.3 The Eighth Plan outlay for Agriculture & Allied Activities (excluding forestry and wild life) is Rs. 10979 crores. During the first three years of the Eighth Five Year Plan, the outlay provided was of the order of Rs.6687.9 crores, accounting for 60.91% of the total.
Fertilizers 5.4 Actual consumption of fertilizers which stood at 127.3 lakh tonnes in 1991-92 declined to 121.5 lakh tonnes in 1992-93 and is antici- pated to increase to 140.6 lakh tonnes in 1994- 95. The decline in fertilizer consumption was mainly because of substantial rise in the prices of phosphatic and potassic fertilisers As against the optimum NPK ratio of 4:2:1 an actual ratio has now become 9.5:3.1:1. This calls for taking up urgent steps to correct im- balances in fertiliser use, Increased manufac- ture and use of slow release of fertilizer needs to be encouraged through a proper package of incentives besides promotion of balanced and integrated use of fertilizers and increased fer- tilizer consumption in the low consumption rainfed.
Agricultural Credit 5.5 Credit disbursement in agriculture has in creased substantially from Rs. 11507 crores in 1990-91, to an estimated level of Rs. 16,700 crores in 1994-95. Faster growth of' agricul- tural credit cannot be sustained unless viability of credit disbursing institutions is ensured. Co- operative Credit Structure would need to be revamped to increase the flow or credit for agricultural production purposes.
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Horticulture 5.6 Area under fruit crops increased by 11.5% from 28 lakh hectares in 1991-92 to 32 lakh hactares in 1992-93. Fruit production in the same period registered a 15. 1% increase from 286 lakh tonnes to 329 lakh tonnes. There was 8.8% reduction in area under vegetables while vegetables production increased by 21.2% from 5 85 lakh tonnes to 71 0 lakh tonnes during this period.
Plantations 5.7 Tea production has increased from 721 million kg. to 730 million kg. from 1992-93 to 1993-94 and expected to be 800 million kg. in 1994-95. A 10-year Perspective Plan has been drawn up to achieve a production target of 1000 mill. kg. by 2000 A.D. Coffee production has also gone up from 161.5 million kg. in 1992-93 to 180.0 million kg. in 1994-95, In order to boost the growth of coffee sector, policy of Free Sale Quota has also liberalised. Export of spices has increased from 1.3 lakh tonnes in 1992-93 to 1.8 lakh tonnes in 1993- 94 and it is expected to be 1.65 lakh tonnes in 1994-95. Production of natural rubber in- creased from 3.9 lakh tonnes to 4.74 lakh tonnes from 1992-93 to 1994-95. 97% of the domestic demand is met by local production and rest is met from import. Rubber production enhancement strategy includes expansion of area in non- traditional regions, replanting of low and old yielding for higher yielding varie- ties, and improving productivity of existing area by popularising of adoption of modern and improved agricultural practices.
Diversification of Agriculture 5.8 Strategy of agricultural diversification should encourage diversification of crop hus- bandry and other allied activities like fisheries, processing of agricultural commodities etc. for higher productivity and better return.
Fisheries 5.9 During 1990-91 to 1993-94, annual growth rate of fish production worked out to 6.2% The production exceeded the target each year. With the continuation of the tempo of higher fishery production, a target of 55 lakh tonnes would be achieved by the terminal year of 8th Plan. Marine products export which was at the level of 1.72 lakh tonnes valued at Rs.1375 crores in 1992-93 has reached the level of 2.44 lakh tonnes valued it 2504 crores in 1993-94. Fish seed production also increased substantially from a low level of 969.1 crore fry at the end of 7th Five Year Plan. to the level of 1350 crore fry in 1993-94. However, technology im- provement in case of prawn seed hatchery needs greater attention to cope with the de- mand.
Dairy Development & Animal Husbandry 5.10 The milk production increased from 557 lakh metric tonnes in 1991-92 to 602 metric tonnes in 1993-94. Artificial insemination (AI) increased from 315 lakhs to about 320 lakhs during the same period. Egg production which was 2198.3 crore numbers in 1991-92 had gone up to 2377.2 crore number by 1993 - 94. Wool production rose from 399 lakh kgs. to 412 kg. during this period. The Eighth Plan targets of 708 lakh tonnes of milk and 3000 crores of eggs could be achieved. Added atten- tion needs to be focused on improvement of genetic stock through cross breeding/upgrad- ing, promotion of livestock fanning and poul- try on scientific lines.
Investment in Agriculture 5.11 There has been deceleration in agricul- tural investment during the 1980s. Total gross investment at 1980-81 prices declined from 4636 crores in 1980-81 to 4345 crores in 1989- 90 and recovered to 4595 crores in 1990-91. Thereafter it again declined to 4567 crores in 1992-93. Public sector investment in agricul- tur primarily relates to departmental irriga- tion works by Centre & States. Encouragement would need to be given to accelerate the level of investment by private sector for higher growth of agriculture, besides inducing the farmers to intensify their efforts for making higher investment.
Agro-Exports 5.12 Agro-exports increased from Rs.2057 crores in 1980-81 to 9457 crores in 1992-93 further to a record level of 13021 crores in 1993-94. In terms of US $ export increased from $ 2601 million to $ 4115 million in 1993-94. However, the share of agriculture in total exports has come down from 27.7% in 1985-86 to 18.7% in 1993-94. The constraints operating on agro exports are volume insuffi- ciency, quality deficiency, inadequate infra- structural facilities at Air Port and Sea Port, etc. In the changed scenario of liberalisation of Indian economy, emphasis pa would need to be given to short term and long term strategy for enhancing the competitiveness of agro ex-
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ports in the global markets besides taking up export promotion measures.
Section 2 :IRRIGATION, FLOOD CON-
TROL & COMMAND AREA DEVELOP-
MENT Decline in Funding for Irrigation Sector
5.13 During the period (1951-94), the creation of irrigation potential increased from 22.6 M.Ha. to 85.05 M.Ha. and consequently utili- sation increased to about 76 M.Ha. by 1993-94 as a result of massive investment of around Rs.52600 crores (including Rs.7050 crores of institutional financing but excluding other di- rect investments by the Public Sector mainly as subsidies to minor irrigation development through various programmes). During 8th Five Year Plan, total outlay of Rs.32525.79 crores has been approved for I&CAD sector (Major & Medium - Rs.22414.53 crores, mi- nor irrigation - Rs.5977.26 crores, flood con- trol - Rs. 1 623.37 crores and CAD programme - Rs.2510.13 crores) of which overall only about 47.18% (Rs.15347.60 crores) could be spent during three years of the Plan Period i.e., 1992-95 due to which besides the CAD and flood control activities, irrigation potential of the order of 1.76 M.Ha.(against 8th Plan target of 5.08 M.Ha.) and 4.82 M.Ha. (against 8th Plan target of 10.71 M.Ha.) through minor irrigation during 1992-95 have been created. At the time of formulation of 8th Plan the priority to I&CAD Sector envisaged was 18.48% which has gradually been reducing to 15.94% in 1992-93 (actual expenditure), to 15.68% in 1993-94 (R.E.), and to 14.08% in 1994- 95 (R.E.). Consequently, funding of even ongoing 195 major and 323 medium irri- gation projects was on an average Rs.3380 crores per annum against their total spill over cost of Rs.38994 crores (at the 1991-92 price level) at the beginning of 8th Plan. The direct fall-out is the steep reduction in the number of projects completed during 1992-95 against the target set for 8th Plan since only about 33% of ongoing major/medium projects are antici- pated to be completed during 1992-95.
Low disbursement in Externally assisted
projects 5.14 The level of disbursements in irrigation sector has been low with respect to the projec- tions in the agreement with the donor agencies mainly due to inadequate financial support to theft projects in the State Plan as well as delay on account of various clearances like Environ- mental & Forest, R&R, and land acquisition. etc.
Overdue revision of existing low Irrigation
Water Rates 5.15 Revision of water rates has been infre- quent, hesitant and very much less than the increase In costs. In Tamil Nadu, the water rates were last revised 32 years ago, in Kerala, J&K and Himachal Pradesh since mid-seven- ties and Andhra Pradesh, Bihar, Gujarat, Kar- nataka, Madhya Pradesh, Orissa, Rajasthan and West Bengal during early eightees. The revenue collection from the water rates is able to meet, on an average, only one third of the O&M cost. Recently a Group of officials (GOO) set up by the Planning Commission under the Chairmanship of the Member- Sec- retary, Planning Commission has recom- mended that the water rates should be appropriately enhanced by the States so as to meet at least O&M cost of the projects in next five years.
Renovation & Modernisation of Major &
Medium Projects 5.16 Due to deferred maintenance, the benefits from old irrigation projects has been depleting, About 130 lakh ha. of irrigated area from pro- jects completed before Independence and an- other 80 lakh ha. from schemes completed 25 years ago are required to be attended to which is estimated to cost Rs.8000- 10,000 crores against which the outlay is Rs.1773 crores ill 8th Plan and the expenditure during 1992-95 is only Rs.787 crores (44.3%).
Lag in the creation and utilisation of irri-
gation potential 5.17 As per available figures, the gap between the potential creation and utilisation at the end of 1993-94 is obtained at the level of 8.79) M.Ha., which is on the basis of different crite- ria adopted by different states and not as per the definition prescribed by the Planning Corn- mission. In case of minor irrigation, the above figure is on non-native basis. Thus, the statisti- cal data base for potential creation and utilisa- tion of irrigation needs to be urgently reassessed and firmed up. The CAD pro- gramme(1974-75) which presently covers 181 major and medium projects with total area of 21.18 M.Ha. administered through 54 CADAs spread to 22 States and 2 UTs is for bridging the gap between potential created and utilisa- tion. Based on experience gained over last 20 years, this programme needs to be re-ori-
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ented/ re-structured in order to make it more effective in terms of end result, i.e., optimising the utilisation of irrigation potential and agri- cultural productivity. Total expenditure of Rs.4317 crores (including Rs. 1425.65 crores under Central Sector) was incurred upto the end of 1994 for this programme.
Conjunctive use of Surface and Ground
Water 5.18 About 6 M.Ha. of the area is considered to be waterlogged out of which about 3.4 M.Ha. is by surface flooding. It has been found that the area with Water logging within 2 Mtr. depth below Ground level is 36.36 M.Ha. in August which goes on decreasing in sub- sequent months to 3.42 M.Ha. in April. The simultaneous development of ground level in conjunction with surface water would help in lowering the water table and hence mitigate water logging conditions. Besides this con- struction of augmentation TWS for increasing the supplies in the canals during summer months when water is short supply already in existence in certain canal system in Punjab, Haryana, U.P. & M.P. which needs to be adopted in other areas of need.
Participatory Irrigation Management 5.19 There are about 4455 WUAs in various forms and sizes covering about 0.347 M.Ha. irrigated area which is less than even half a percent of the total area presently under irriga- tion in the country. Presently, WUAs are being organised for the areas covered by one course outlet (covering about 40 ha. area) which sub- sequently may be upgraded to the distribu- tory/minor levels.
Chapter 6
INFRASTRUCTURE
Section 1: ENERGY
Hydrocarbons 6.1 Consumption of petroleum products grew at around 5.5% during 1992-95 against the anticipated rate of 6.9 per cent during Eighth Plan period. Crude oil and natural gas produc- tion in 1996- 97 are expected to be about 38.5 Million Tonnes (MT) and 25 Billion Cubic Meters (BCM) against the targets of 50 MT and 30.18 BCM respectively. Crude oil pro- duction during 1992-97 is now estimated to be 167 MT against the target of 197.3 MT. As a result, Shortfall in domestic oil production, the total import bill during 1992-97 may be of the order of Rs.89,500 crores as against the plan estimate of Rs. 74,600 crores.
6.2 The establishment of now reserves will significantly fall short of the target of 1325 MT of oil and oil equivalent of gas during the 8th Plan period. An accelerated exploration pro- gramme has been taken up and success of this programme will be critically important for the level of domestic production in the coming years.
6.3 The refining capacity in the terminal year is expected to reach the target of 65 million tonnes per annum. A number of initiatives have been taken for private sector participation in the oil sector. Success in this area will de- pend upon quick formulation of the approach about the oil pricing regime, greater autonomy to public sector undertakings and other related issues. The earlier decision to allow develop- ment of already discovered fields by private parties need to be reviewed because of im- proved internal resource position of national companies like ONGC and OIL.
Coal 6.4 Coal consumption grew at an annual rate of 4.3% during the first three years as against the rate of 6.9% envisaged for the Eighth Plan period. Production grew at the rate of 3.4% per year during 1992-95 as against the rate of 6% envisaged for 1992-97. The domestic coil- sumption and production during 1996-97 are expected to be 311 MT and 300 MT against the targets of 311 MT and 308 MT respectively. Lignite production is expected to be 18 MT against the target of 19.6 MT in 1996-97.
6.5 Transport bottlenecks persist in the move- ment of coal. It is necessary to attempt large scale beneficiation of non-coking coal to re- duce the rail transportation requirement. Rail- ways also need to substantially increase their coal transportation capacity.
6.6 Projects for a capacity of 36 million tonnes only have been sanctioned against the target of' production of 72 million tonnes per year from new projects. Action on new projects needs to be speeded up.
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6.7 Private sector participation in coal produc- tion project has been allowed only for captive mine development for new power projects. Commercial mining by private sector would need to be permitted by providing access to infrastructure and awarding suitable ar- eas/coal blocks to meet the increasing demand for coal.
Power 6.8 Capacity addition during the Eighth Plan was targetted to be 30538 MW. Actual addi- tion may be between 16500 and 18000 MW only. The Plant Load Factor for thermal sta- tions in the country increased to 60% in 1994- 95 as against 57.1% in 1992-93. The energy and peaking deficits in 1996-97 would be sig- nificantly higher than 20.7% and 9% respec- tively envisaged at the time the Eighth Plan was formulated.
6.9 The share of hydropower will come down to 25.7% in 1996-97 from 27.8% in 1991-92. Hydro-projects will continue to languish un- less additional budgetary support is given by the Government. Such support is also neces- sary for improvement of the transmission and distribution system. Nuclear power has been plagued by high cost, long lead time for new projects and unsatisfactory operational per- formance.
6.10 While some State Electricity Boards (SEBs) have shown improvement in their fi- nancial performance, the commercial loss of all SEBs taken together has been above Rs. 6000 crores per annum. The tariff structure needs to be made remunerative to improve the financial position of SEBs.
6.11 Competitive bidding should be resorted to for future power projects and proper empha- sis should be given on improvement in the financial position of SEBs to obviate the ne- cessity of counter-guarantees by the Govern- ment. PSUs also need to be given equal opportunity for participating in competitive bidding and to raise funds from domestic and international market.
Rural Energy 6.12 There is likely to be shortfall in achieve- ment of the targets relating to village electrifi- cation, pumpset energisation and in power generation programmes through Non-Renew- able Sources of Energy (NRSE). Actual achievements during 1992-95 for village elec- trification and pumpset energisation have been 11,000 villages and 11.65 lakh pumpsets against the Eighth Plan targets of 50,000 vil- lages and 25 lakh pumpsets. NRSE needs to be encouraged in the villages yet to be electrified and located in far-flung and remote areas.
Energy Conservation 6.13 It is necessary to set up an Energy Con- servation Authority with statutory powers to achieve any significant success In realising the present energy conservation potential. Such an organisation can formulate the policy package. the financial incentives as also necessary pro- grammes and projects for different supply and end-use sectors.
Plan Outlay 6.14 While the oil sector has not faced any problem about plan expenditure, the coal and lignite sector expenditure during 1992- 95 was 57.6% of the approved outlay for Eighth Plan at constant prices, the corresponding figures for Central and State power sector being 47% and 26% only. There have been shortfall in raising Internal and Extra Budgetary Re- sources.
Section 2: TRANSPORT
Railways 6.15 The passenger traffic in the Railways was 30500 crore passenger kilometer (PKM) in 1993-94 against the target of 32665 PKM. The originating freight traffic in 1993-94 was 3587 lakh tonnes against the target of 3700 lakh tonnes. The improvement in productivity of railways in terms of Net Tonne Kilometer (NTKM) per wagon per day has been sluggish and the target of 1750 NTKM/wagon/day for 1996-97 is unlikely to be achieved.
6.16 Track renewal programmes are on sched- ule. However, some of the areas needing atten- tion are rehabilitation of bridges, improvement in operational efficiency of the system, techni- cal upgradation of assets, selective expansion of line capacity on heavily congested sections, proper prioritisation of ongoing projects, ef- fective policy package for private participa- tion, etc.
Roads 6.17 Resource availability for maintenance and construction of new roads, particularly National Highways, has been inadequate. Na- tional Highways now account for 35% of road traffic, though constituting only 2% of the road network. These need special attention.
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6.18 Apart from additional budgetary alloca- tion, an effective policy for involving the pri- vate sector needs to be evolved.
Road & River Transport 6.19 The physical performance of State Road Transport Undertakings kind Ports registered improvements. However, their financial per- formance as a whole has not been satisfactory. Central Inland Water Transport Corporation also incurred a loss of Rs. 9.62 crore in 1993 - 94. Policies need to be evolved for facilitating private investment in all these areas. Shipping Corporation has taken steps for modernisation of their fleet. Coastal shipping has not been able to achieve its full potential.
Civil Aviation 6.20 There has been significant increase in private participation in this sector. This has, however, affected the earnings of Indian Air- lines and improvement in operational effi- ciency and financial performance of the national airlines will be critical in the coming years.
Section 3: COMMUNICATION
Posts 6.21 An outlay of Rs.325 crore was approved for the 8th Plan. About 57% of the outlay (at 1991-92 prices) is likely to be utilized during the first three years. The pace of utilization of funds on technology upgradation has been slow during the first two years but the expen- diture has picked up from 1994-95. The expen- diture on buildings has been excessive and out of control and needs to be checked effectively.
6.22 Slow pace of opening of post offices in the rural areas is an area of concern. Only about 44% of the Eighth Plan target is likely to be achieved during the first three years. A change of strategy is envisaged from 1995-96 with the launching of a new scheme called 'Panchayat Sanchar Sewa Yojana.' Due to its low cost, the now scheme is expected to pro- vide services to thrice the number of villages with the same expenditure as under the exist- ing scheme.
6.23 Large amount of subsidy provided on postal stationery and services is one of the main reasons for deficit. To ensure efficiency and improved duality of services, selective opening up of some services to the private sector may be desirable such as opening of new post offices, printing of postal stationery and sale of stationery through licenced agents. A comprehensive cost reduction strategy needs to be worked out by the Department.
Telecommunications 6.24 Rapid expansion of network, modernis- Ing it with the state of art technology and improving efficiency are the basic thrust areas of the Eighth Plan. An outlay of Rs.25137 crore was approved for this sector including Rs.23946 crore for the Deptt. of Telecom. About 61 % of the outlay is likely to be utilized during the first three years of the 8th Plan.
6.25 The National Telecom Policy announced in 1994 aims to ensure telephones on demand, achieve universal coverage and to ensure in- ternational standard services. The target for new telephone connections has been revised upward to 100 lakh DELs i.e. an addition of 25 lakh over the original target. For rural connec- tivity, the target has been revised from 3.6 lakh villages to covering all the 5.7 lakh villages of the country by March, 1997. The additional re- sources needed to achieve these targets are expected to flow from the private sector. Dur- ing the first three years, 36.4 lakh new connec- tions have been provided i.e. 49% of the Eighth Plan target. About 1. 14 lakh villages are ex- pected to be covered during the first three years i.e. 33% of the Plan target. Keeping in view the efforts initiated by the Department to mobilize resources from other means like leasing etc., the original target of 75 lakh DELs is likely to be achieved.
6.26 Limited availability of funds with the public sector has been the single most impor- tant factor restricting the growth of telecom facilities. More than 20 lakh people are waiting for the basic telephone facilities. The outlay available for the telecom sector has been de- termined by the capacity of the public sector to generate internal resources and to raise money from the market (bonds). In the first three years against the target of mobilizing the internal resources of Rs. 10720 crore at 1991- 92 prices, the actual achievement is likely to be Rs.10193 crore resulting in short-fall or Rs.527 crore. This is inspite of 15 to 20% tariff increase effected in 1993. The growth in reve- nue per DEL has been much lower than the assumed rate of 6%. One of the main reasons for lower realization is lack or a proper tariff policy. A comprehensive rationalization may be needed in order to ensure optimum mobili- zation of resources.
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6.27 The Eighth Plan has emphasized the need for fundamental structural and institutional re- forms in the sector to ensure development of telecom facilities at the required rate and bring them at par with the international standards. The entire issue of reforms has been discussed and debated at length at different Policy for- mulation levels in the Government. The main areas Involved are :
i) Involving private sector in the basic telecom Services;
iii) Separation of three major functions of pol- icy formulation, regulation and service provision;
iii) Setting up of an independent regulatory mechanism; and
iv) Evolving appropriate organizational struc- ture for the operational network of the Department of Telecom.
6.28 On the basis of consensus reached, insti- tutional reforms in respect of Involvement of private sector in basic services and setting up of an independent regulatory mechanism (TRAI)have already been affected. Consensus is yet to emerge with regard to other two areas.
6.29 For any reforms programme to be effec- tive changes have to be implemented as a package. Viewed in this context, monopoly in long distance operations should not be all owed to continue as competition in basic services has already been permitted.
6.30 In the changed scenario, the present departmental structure of DOT is neither fea- sible for a desirable organizational pattern. One of the more appropriate alternative may be to set up one or more independent corporations for its operational network, as in the final see- nario 4 or 5 private companies may emerge as the main operators in the country. With the regulatory and service provision being carved out to separate entities the Deptt. of Telecom- munications will be left only with policy mak- ing functions. This would also call for review of the role of Telecom Commission.
6.31 As a result of deregulation of telecom equipment manufacturing and changed pro- curement policy of DOT, the two equipment manufacturing units in the public sector i.e. I.T.I. and H.T.L. are struggling for growth and stability, Lack of demand, decline in prices and surplus labour force are the major problems of these companies. As a long term strategy, these units have to modernize and diversify into the new areas to effectively compete with the pri- vate sector. To help these companies over- come the problems in the short-run, adequate orders have to be ensured by the Deptt. Some price preference (10 to 15%) may also be needed for a limited period.
Chapter 7
INDUSTRIAL DEVELOPMENT POLICY AND PUBLIC SECTOR REFORMS 7 1. The major thrust in the 8th Five Year Plan for development of industries was on virtual abolition of industrial licensing, reforms in the Monopolies and Restrictive Trade Practice (MRTP) Act, enhanced external competition through rationalisation of tariff, liberalisation of the foreign investment approvals and for- eign technology agreements and reforms in public sector including dereservation. The In- dustrial Policy of 1991 has taken into account the direction given in the 8th Five Year Plan.
7.2. The 8th Plan alms at industrial growth rate of about 7.5% per annum corresponding to the GDP growth rate of 5.6% per annum. The National Renewal Fund (NRF) has been con- stituted to protect the interest of the worker adversely affected. Government have been taking various steps from time to time to tackle the issue relating to sickness in industries.
7.3. The 8th Plan visualises greater autonomy and more efficient performance of public sec- tor enterprises. There has been some shortfall in raising of internal and extra budgetary re- sources by the Central PSFs. As against the total 8th Plan allocation of Rs. 351 95 crores (including budgetary support of Rs. 7150 crores) for the CPSEs in the Industry & Min- erals Sector, the actual expenditure in the first three years has been Rs. 20900 crores (includ- ing budgetary support of Rs. 8090 crores) The CPSEs have thus raised Rs. 12810 crores through IEBR in the first three years against a Plan target of Rs. 28045 crores. A Large num- ber of PSEs have signed MOUs for improved
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efficiency. Greater functional autonomy has to be extended to the public sector to enable them to compete with the private sector under the present liberal environment.
7.4. The procedure for environmental clear- ance needs streamlining for expeditious pro- ject implementation.
7.5. The disinvestment strategy of public sec- tor needs to be reviewed for making it more transparent. The recommendations of the Ran- garajan Committee for devising a clear action plan instead of yearwise targets, financial re- structuring of the PSEs, issue of prospectus etc. need consideration. Part of the resource generated through disinvestment may also be considered for being ploughed back to the enterprises for technological upgradation and diversification programmes.
7.6. Some of the State Governments have taken significant steps in industrial reforms.
7.7. The Industrial Policy has started paying divide rids as reflected in the estimated growth of 8.3% in industrial production during April - December 1994-95 which is a significant improvement from 2.3% in 1992-93 and 4.1% in 1993-94.
Sectoral Performance 7.8.1 Steel Sector: The target of production fixed for the steel sector in the 8th Plan is expected to be achieved.
7.8.2 Non-Ferrous Metals: The target for non- ferrous metals is not likely to be achieved fully.
7.8.3 Fertilizers Sector: Fertilizers sector calls for a long-term policy to attract private invest- ment. The gas-based fertilizers plants need to be assured of continuous supply of gas.
7.8.4 Engineering Sector: A large number of public sector enterprises under the Department of Heavy Industry needs to be re-vamped, as they are incurring losses continuously over the years. Against a Plan profit target of Rs. 1151 crores, these units may suffer losses of Rs. 1174 crores.
7.8.5 Cement Industry: While the over-all per- formance of the cement industry is good, the public, sector enterprise, Cement Corporation of India, needs overhauling.
7.8.6 Sugar Industry: The sugar policy in op- eration requires revision to ensure availability of sugarcane to the sugar industries and to bring about greater efficiency in this sector. There is a good case for delicensing of the industry.
7.8.7 Petro-Chemicals: The 8th Plan produc- tion targets in most of the petrochemicals are likely to be achieved. There may be some shortfall in the targetted production of some basic chemicals. PA
Minerals 7.9. Minerals Sector has been thrown open to private enterprises through the amendment of MMRD Act, 1957. There has been delay in taking up two mining projects of 5 million tonnes of annual capacity each by NMDC. With de-control and a substantial reduction in import tariff and a downtrend in the LME prices of non-ferrous metals, the public sectors in non-ferrous metal manufacturing have suf- fered a set beck. However, there has been some sign of improvement in the LME prices thereby improving the operational results of the public sector enterprises. Three copper smelters with a total capacity of around 2.5 lakh tonnes per annum are expected to be set up in the private sector.
Village & Small Industries (V & SI) 7.10. The SSI Sector contributes about 40% to the gross turnover for the manufacturing sector and 30% to the total exports. It also offers excellent employment potential. New schemes like Prime Minister's Rozgar Yojana (PMRY) to provide self-employment to educated unem- ployed youths is under implementation. The scheme has a target of 14 lakh employment during 8th Plan period. The Khadi and Village Industries Commission (KVIC) has taken up) major programmes to create 2 million new jobs during the remaining period of the 8th Plan with an investment of about Rs. 5600 crores, In the handloom sector, a scheme for setting up for 3000 Handloom Development Centres (HDCs) and 500 Quality Dyeing Units (QDUs) have been taken up at an estimated cost of Rs. 849 crores. In order to create em- ployment opportunities in the handloom. handicrafts, wool, sericulture and coir sectors, a number of schemes have been introduced. National Sericulture Project (NSP) is under implementation at an estimated cost of Rs. 555 crores with the assistance of World Bank and Swiss Development Corporation (SDC).
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Food Processing Industries (FPIs) 7.11. The FPI's share in the GDP is of the order of 18% and it provides employment to about 1.5 million people. 70% of the industry is in the un-organised sector. This sector suffers from inadequate investment, shortage of working capital and outdated technology. This sector has a big potential for rapid growth and needs to be promoted with all necessary assis- tance.
7.12. Government of India has taken several steps for promotion of this industry, including declaration of this industry as a priority sector, delicensing of major areas, automatic approval upto 51% of foreign equity participation, sim- plification of investment procedures etc.
Chapter 8
SCIENCE & TECHNOLOGY AND ENVIRONMENT
Science & Technology 8. 1. As against the total Eighth Plan outlay of Rs. 41 19 crore, the expenditure during the first three years is expected to be of the order of Rs. 3176 crores for the Central S & T, Depart- ments/Agencies.
8.2. The major thrusts have been on basic research in frontline fields; innovative re- search to achieve self reliance, diffusion of appropriate technologies and integration of S&T in socio-economic and rural sectors. The thrust of the Atomic Energy research has been on design and development of nuclear reactors for power generation, basic research, isotope production etc. These have resulted in the de- velopment of several spin-off technologies.
8.3. Under Bio-technology, the thrust has been on R & D product development, technology transfer and demonstration; integrated man- power development, augmentation of infra- structural facilities and their optimal utilisation, special programmes for specific groups and weaker sections etc. Significant achievements have been made, besides launching of Technology Mission-mode pro- jects bio-fertilizers, biological pest control and aquaculture. There is a need to formulate a bio-technology profile for the country as well as to ensure transfer of technology.
8.4. In the ocean areas, the emphasis has been laid on stabilising the Antarctic and polymet- allic nodules programmes, the development of ocean data and information system etc. Be- sides the expeditions to Antarctica, several achievements have been made in the areas of polymetallic nodules programmes; coastal ocean monitoring and prediction system; ma- rine satellite information system, preparation and dissemination of potential fishing zone, setting up of a new Institute, the National Institute of Ocean Technology (NIOT) etc.
8.5. Major activities in the S & T include support to R & D projects, national facilities, special technology development programmes, launching of technology mission-mode pro- jects on sugar production technologies, ad- vanced composites and fly ash utilisation and disposal, promoting technology information system, home grown technologies through Technology Information Forecasting and As- sesment Council (TIFAC); international S&T coorperation and joint programmes with de- veloped countries; development of technolo- gies for the socio-economic sector were largely directed towards rural and urban poor augmentation of facilities for metereological forecasting, seismological observations etc. A technology development fund has been cre- ated to accelarate the commercialisation of indigenous technologies. In future, the empha- sis would be to strengthen the R&D efforts further, transfer of knowhow to industry, strengthening of international S&T coopera- tion; operationalisation of the National Centre for Medium Range Weather Forecasting, se- lective modernisation of infrastructural facili- ties of the aided scientific institutions etc. The need in this area is the application of resection results for technology development leading to the improvement in the quality of life through the involvement of industries/users and also by reactivating the STAC and IS-STAC etc. There is a need for the S&T enterpreneurship development programmes to be tied up with the employment generation programmes. A total modernisation programme of the IMD programme is progressively being undertaken.
8.6. The CSIR has made significant achieve- ments in the areas of drugs, pesticides, chemi- cals, biotechnology etc. Mechanism for the export of technologies and the systems of pat- enting were strengthened. Future thrust would be on the modernisation of various
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CSIR laboratories , upscaling of technologies, extension of societal programmes etc. Despite the achievements made by the CSIR, there are certain weaknesses noticed. The steps needed to rectify them are : further restructuring of the non-plan outlay, projectisation of the pro- grammes especially the modernisation aspects of the CSIR laboratories etc' For the creation of technology transfer fund, a Joint approach with the DST is required. The NISSAT,NRDC and CEL need to be made self- sustaining.
8.7. The thrust of Space, Science & Technol- ogy has been on the development of operation- alisation of indigenous satellites, launch Vehicles etc. Significant achievements include launching of multi-purpose communication satellites; development of capabilities for the ASLV,PSLV and GSLV and the Remote Sens- ing, application for forest mapping, crop inven- tory, ground water targeting, flood mapping; integrated management for sustainable devel- opment through micro-level planning, setting up of Antrix Corporation etc. In the future, second generation multi-purpose communica- tion satellites would be launched. There is a need for advance action in the indigenous technological development of strategic items; capability for launching the INSAT class sat- ellites, building up of necessary inventories by involving industries,stock piling of the inven- tories for future INSAT systems etc.
8.8. In the areas of Forensic Science, infra- structure facilities in terms of equipment and manpower were augmented to strengthen their R&D efforts and the scientific analysis of crime detection. The efforts of the police wireless system were on testing and evaluation of high speed telecommunication system for their telecommunication network. Proper projectisation of the requirements in this sector is urgently needed.
8.9. In the context of New Economic Policy, steps taken to re-orient the S & T activities include: the creation of a Technology Devel- opment Fund, closer interactions with the user industries for technology transfer; launching of the application oriented R & D programmes etc. Some additional steps needed are : a vigorous Market-oriented research, creation of a corpus fund through, 2-3% of the turnover of major industries for the promotion of industrial R&D so as to reduce the dependence on the budget support eventually from,the Government. Also required is the awareness and the necessary preparation on the Post-GATT scenario, par- ticularly on the IPR and patents amongst the S & T institutions and universities.
Environment 8.10. The Government adopted a National Conservation strategy and Policy Statement on Environment and Development and the Policy Statement on Abatement of Pollution. India has played a major role in the United Nations Conference on Environment and De- velopment at Rio And later became signatory to various international conventions aiming at protecting the environment.
8.11. The allocation for the Ministry of Envi- ronment and Forests, the nodal agency for environmental protection, for the Eighth Plan is Rs.1200 crores, of which Rs.938.19 crores have been spent during the first three years.
8.12. The Ganga Action Plan (GAP) which is 100% Centrally Sponsored Schemes (CSS), in its first phase, has attempted to take up 26 schemes. Of these, 230 schemes have been completed so far. The Ganga Action Plan Phase II has been taken up as a 50:50 CSS between the Centre and the States (U.P, Delhi, Bihar and West Bengal) and the National River Action Plan(NARP) is also being launched.
8.13. A National Afforestation and Ecodevel- opment Board (NAEB) to undertake eco-de- velopment activities in and around the protected areas and a Department of Waste- lands development Board for integrated eco- development works in the non-forest area's have been created.
8.14. The GAP Phase I, though could improve the water quality of River Ganga, the reduction in the levels of coliforms, heavy metals and pesticides need further improvement.
8.15. Further works undertaken under the GAP-II and the NRAP would be able to adopt suitable technologies with adequate invest- ments. There is a need to collect and dissemi- nate environmental data which could be properly integrated to Environmental Impact Assessments.Priority is also to be given for inventorisation of bio-diversity.
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Chapter 9
STATE PLANS - TRENDS & REFORMS 9.1 The approved Eighth Plan outlay for the State Sector is Rs.186235 crore. Of this, the four Special Area Programmes of BADP, HADP, TSP and NEC account for Rs.4500 crore. The remaining outlay of Rs.181735 crore consists of a total outlay of Rs.175485 crore for States and Rs.6250 crore for U.Ts. The actual expenditure of the States in the first three years of the Plan period has been Rs.78121.99 crore, i.e. 44.52% of the ap- proved outlay and that of U.T.'s has been Rs.3851.67 crore which is 61.63% of approved outlay, Taking the States and Union Territories together the actual expenditure in 1992-95 is 44.11% of the approved Eighth Plan Outlay.
9.2 Shortfall of expenditure of the States in the first three years is a cause for major concern. In 1992-93 only 8 States out of 25 were able to reach or exceed the Annual Plan outlay for that year. For 1993 -94 and 1994-95, the corre- sponding numbers are 6 and 13 respectively. For the three years taken together only 7 States has either achieved or exceeded approved An- nual Plan outlays.
9.3 Viewed some what differently, only three States have been able to reach near the 60% level of approved Eighth Plan outlay. Another 13 States have achieved between 45 to 58% i.e. higher than the average of 44.52% of all States taken together. Seven States have reached a level of 30 to 45% and there are two pa States which have achieved less than 30%, the lowest performance being 18.19% by Bihar.
9.4 Starting from Annual Plan 1993-94 a new procedure has been evolved for formulation of the States Plans in which the resources avail- able are assessed and first decided between Deputy Chairman and the Chief Ministers of the States before detailed Plan proposals are formulated and sent by the State Governments. This has the merit of formulating a detailed Plan which can be related from the very begin- ning to the resources in sight. However, the shortfalls in Annual Plans 1993-94 and 1994- 95 of quite a few States show that the proce- dure has to be followed more rigorously and assessment of resources particularly, promises of mobilisation by States in this regard, made carefully.
9.5 The scheme of earmarking of Outlays which has been in vogue since 1969 has been reviewed and made more flexible by:
(i) reducing the extent of the earmarking, and
(ii) making the areas to be earmarked selective as well as State specific.
9.6 Balanced development of all the regions of the country has been a long term objective of successive Five Year Plans. The instruments available for removing region and inter-State disparities are:
(a) Regulating the normal Central Assistance; and
(b) Special Area Programme to target sensi- tive and backward areas.
9.7 It is a matter of concern that the infer State disparities continue to persist after planning for more than four decades.
9.8 Additional Central Assistance for exter- nally aided projects is now a significant source of Plan financing. The disbursements on this are increasingly going to a few States, with as much as 62.3% of such assistance being shared by four States in the first three years of the Plan period. By and large, the States which are able to implement externally aided projects faster and better are also those which are more devel- oped. Hence there is a need to moderate more effectively, externally aided projects among different States so that the objective of the balance in the regional development is not overlooked.
9.9 The States have not fallen behind in the process of the restructuring and liberalisation of the economy. Some States have taken steps which are quite bold in nature. Not only has disinvestment in State level public enterprises taken place, but even privatisation carried out. Several States have permitted their enterprise$ to make public issues. Budget support to the enterprises has been reduced. A few States have made efforts to rationalise tax structure and improve collection of taxes. Abolition of entry tax and octroi by some States are other important features of reforms made.
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Chapter 10
DECENTRALISED PLANNING 10.1 From the very beginning of Planning decentralisation of the planning process has been a matter of concern. Earlier this was looked at by quite a few Committees. If devel- opment has to be in tune with the needs of people and particularly the poor and a high degree of coordination achieved at the field level the planning process has to start at least in the District level if not the Block level. Guidelines were issued by the Planning Com- mission from time to time for formulation of District plans as well as Block level plans.
10.2 After the 73rd and 74th Amendments of the Constitution, it is necessary to look at the matter afresh. Not only are the Panchayati Raj Institutions and the urban local bodies to be suitably empowered by the States through ap- propriate legislation, they have to be given adequate finance. State level finance commis- sions have been constituted for this purpose.
10.3 The NDC Committee on Micro Level Planning and involvement of people at grass root level looked into the question of decen- tralisation of planning process and made sev- eral recommendations which include :
i) Adoption of block/taluka/mandal as the smallest unit of planning;
ii) Monitoring and evaluation of schemes in the sphere of micro level planning;
iii) Merger of institutions such as DRDAs etc., with the Panchayati Raj' Institutions wherever feasible;
iv) Allocation of untied funds by the States to the Panchayati Raj' Institutions;
v) Training of personnel in the field level; and
vi) Sharing of expenditure only of technical staff on planning upto Block/ taluka level between Centre and the State Govern- ments.
10.4 Most of these recommendations have to be implemented by the State Governments and they were addressed for this purpose. The re- sponse has been mixed. No uniform picture emerges.
10.5 The most important issue is what should be the smallest unit of planning - District or Block. Even though the NDC Sub- Committee recommended adoption of Block as the unit of planning, there is no unanimity among the States on this. Keeping in view the present administrative structure in the States upto field level and lack of technical expertise at sub District levels, it does not appear practical to adopt a level lower than the District as the unit of planning, at the present stage.
10.6 Hierarchy of Panchayati Raj Institutions provide a convenient structure for planning at District level and integrating implementation to Sub district levels. There may not be any need to continue institutions for coordination such as DRDAs etc., once planning and imple- mentation is done under the aegis of Zilla Parishads. Since the felt needs of the local people can be effectively gauged and re- sponded to under Panchayati Raj' Institutions including Zilla Parishads, a view has to be taken in due course as to whether parallel programmes under other Ministries and De- partments need to be continued.
10.7 Non Governmental Organisations which operate in the domain assigned to the PRIs should do so in close association with them Whether or not a NGO should work in these areas may be left to the judgement of the Panchayats.
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