9.23 Constituent States of WGDP have been urged to prepare perspective plans for their respective areas. Independent consultants have been engaged for this purpose. Perspec- tive plans of Tamil Nadu and Maharashtra have since been prepared.
9.24 Perspective Plan for the period 1994-95 to 1998-99 prepared by Tata Consultancy Services for WGDP area of Tamil Nadu sug- gests a change in orientation of the WGDP from current " sectoral approach " for better integration of the Programme contents. The sectors which should receive major attention are Forestry, Soil Conservation and Horticul- ture. The Perspective Plan has pointed out that only 1% of the total WGDP area of the State could be treated under soil conservation since inception of the WGDP in the State. Keeping in view the area to be treated during the next seven years, it has been estimated that opti- mally around Rs. 78 5 crore (at 1993 -94 prices ) would be required. This implies a fund re- quirement per year of around Rs. 100 crore as compared to current allocation of the order Rs. 7 crore.
9.25 The Perspective Plan for WGDP area of Maharashtra prepared by Kirloskar Consultant Limited for the period 1995-96 to 2009-1 0 has highlighted that the existing number of water- shed delineated in Western Ghats area are 3671, but an additional 2497 watershed need to be covered during the period mentioned above for which outlay required would be Rs. 1477 crore ( at 1993-94 prices ).
Border Area Development Programme 9.26 BADP continues to be 100% centrally funded programme. The Eighth Plan contem-
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plate that coverage of the Border Area Devel- opment Programme would be increased. Ac- cordingly a review of the Programme had bee made and with effect from the second year of the Plan i.e. 1993-94, the Programme has been extended to States which have international border with Bangladesh.
9.27 The Programme now covers the States of Jammu & Kashmir, Punjab, Gujarat, West Bengal, Assam, Meghalaya, Mizoram and Tripura. At the same time, the Programme has also been revamped, While its objective con- tinucs to be balanced development in remote inaccessible areas situated near the border for ensuring effective administration, its contents have been reoriented to give a sharper focus for tackling special problems which arise in areas contiguous to international border. With the setting up of two Committees particularly one at the State level, considerable flexibility has been given to the States to formulate and implement schemes to meet the Programme objective, Freedom in implementation has been allowed whereby the schemes can be executed by any of the following agencies
(a) State Governments
(b) Central Government and
(c) Non Governmental Organisations
9.28 One important project which continues to be funded under BADP is the Indira Gandhi Nahar Project in Rajasthan. This project is of considerable importance for security and benefits to the people on the western border. The allocations to the project out of the Pro- gramme are expected to help the State Govern- ment to complete it by 2007. The allocations for IGNP out of BADP have been as follows:
Year Allocation
at Constant Prices
( Rs. Crore )
1992 - 1993 47.49
1993 - 1994 43.81
1994 - 1995 45.52
1995 - 1996 42.55
9.29 A detailed statement indicating expendi- ture under $ADO in the first three years of the Plan State Wise is at Annex - 9.10.
North Eastern Council 9.30 After enactment of the North Eastern Council Act, 1971 the North Eastern Council (NEC) was established in 1972 in order to promote Integrated Development of the North Eastern Region. NEC includes the States of Arunachal Pradesh, Assam, Manipur, Megha- laya, Mizoram, Nagaland and Tripura. Under this Act, NEC was envisaged as an Advisory Body empowered to discuss matters of com- mon interest in the sphere of economic and social development to two or more States. However, over the years, NEC has evolved into an advisory, planning, funding and devel- opment agency but is not an implementing agency. Funds are provided to the NEC through the Ministry of Home Affairs. The projects financed by NEC are implemented either by the State or by the Central/Public Sector Undertakings.
9.31 The Eighth Plan outlay for NEC is Rs 1160 crore. In real terms, the North Eastern Council is estimated to have spent Rs. 705.55 crore during 1992-95 which is 60.82 % or the eighth plan outlay. In 1995-96, an outlay of Rs. 296.45 crore (at 1991-92 prices) has been provided to NEC. The actual expenditure in the first three years and the approved outlay for 1995-96 at 1991-92 prices are at Annex - 9.11
9.32 One important development in financing NEC's plans has been the use of Extra Budg- etary Resources in addition to budget support This was not contemplated when the Eighth Plan was formulated. This additional financ- ing has been possible because some of the important NEC schemes in Power Sector are being implemented through Public Sector Un- dertakings. These schemes contemplated fi- nancing the projects through equity and debt. While the former is being provided out of budget support the latter has been raised by the Undertakings from loans from financing insti- tutions and borrowings from banks ( based on Statutory Liquidity Ratio ).
9.33 According to the Eighth Plan, 49,50 % of the outlay was to be used for development of Transport and Communications in the region. The second priority in the NEC Plan is devel- opment of Power sector for which 37.50% of the outlay was to be utilised. Priority has been given to this sector and expenditure has been in excess of the proportion originally contem- plated for the Eighth Plan. The small shift in actual expenditure / outlays during the first three years of the Plan, in favour of Power
368
Sector is because major Hydro Electric Power Projects taken up under NEC Plan have reached a stage where fund requirement is very high. The major power sector projects are (i) Doyang HEP (75 MW), (iii) Ranganadi HEP ( 405 MW), (iii) Ranganadi Transmission Line ( 170 Kms). and (IV) Rokia Gas Based Power Project (2x8 MW).
Tribal Sub-Plan 9.34 TSP strategy was started in the Fifth Five Year Plan in order to raise the level of eco- nomic condition and protecting the interest of the Scheduled Tribes through legal and admin- istrative support. It is in operation in eighteen States and two Union Territories through 194 Integrated Tribal Development Projects (ITDP), 250 Modified Area Development Ap- proach (MADA) Pockets and 77 clusters of tribal concentration. The Government of Jammu & Kashmir is in the process of forming ITDPs and MADA Pockets.
9.35 Special Central Assistance (SCA) for Tribal Sub Plan is provided to the State Gov- ernments/UTs as an additive to States' Plan for implementation of various socio-economic programmes in identified projects and for the tribals residing outside these identified pro- jects in the States/UTs. It helps in encouraging State Governments to invest more in Tribal Sub Plan areas. Special Central Assistance (SCA) is generally used for family oriented income generating schemes in the sectors of agriculture, animal husbandry, horticulture, minor irrigation, forest education, soil conser- vation, minimum needs programmes, village and small scale industries etc. and infrastruc- tural development incidental thereto. The out- lay and expenditure during each year of the Eighth Five Year Plan under Special Central Assistance are given in the following Table No. 9.1.
Reform process 9.36 The process of reforms initiated in 1991 has also influenced the thinking of the State Governments to some extent. Though the re- sponse has been somewhat mixed, a few States have taken steps which are indeed bold in nature. Not only has disinvestment of State Level Public Enterprises been promised or al- ready effected but privatisation also carried out for a few enterprises. Several States have allowed their enterprises to make public issues and reduced budget support to the enterprises. The enterprises been encouraged to approach the financial institutions for raising loans. A few States have made efforts to rationalise tax structure and improve collection of taxes. Abolition of entry tax and octroi by some States is another important feature of the re- forms effected.
Financial and Fiscal Reforms 9.37 In line with the trend from the recent past to lessen the hold of the Government on non- essential items/activities, a number of States have initiated action for privatisation of some of the undertakings in part or in whole by disinvestment of Government equities from these enterprises and opening up of the enter- prises for public investment by public Issue Of shares etc. Other steps contemplated include merger of corporations/ undertakings with overlapping functions, opening up areas hith- erto reserved for public sector for private units to co- exist with Government units to intro- duce an element of competition and to make it necessary for the latter to operate efficiently to exist in business.
9.38 In the case of loss-making Public Ent- prises, efforts are being made to help them turn around, or privatise them alternatively, wher- ever possible or even phase them out unless
Table No. 9.1
Special Central Assistance under Tribal Sub Plan
[at 1991-92 prices ]
(Rs. in Crore)_
VIIIth 1992-93 1993-94 1994-95 1995-96
Plan Outlay Exp. Outlay Exp. Outlay Anti. Approved
Outlay Exp. Outlay
1250.00 228.31 228.26 248.53 248.40 208.73 208.73 234.04
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they happen to serve a significant social objec- five. Keeping in line with the policy of making State level Public Enterprises to be inde- pendent of budgetary Support, they have been permitted to borrow money from the open market on specific conditions. The State Gov- ernments have also been making efforts to rationalise the tax structure and improve the collections with the existing taxes. In the case of sales tax, slabs have been reduced and the rates have been rationalised. A few states have taken bold steps in the field of reforms spe- cially in Transport, Power & Industries sec- tors, highlights of which are given below
Transport 9.39 Under the Transport sector, Railways, National Highways, major ports and airports are in the Central sector. State Highways, road transport, Inland Water Transport and minor ports are in the State sector.
9.40 Before the 8th Plan, the entire expenditure on State Highways was met through budgetary resources of the States. With the liberalisation of the economy, States in general have become aware of the need to evolve private sector in the development and maintenance of roads and bridges. Some States like Madhya Pradesh have already negotiated with private entrepre- neurs for the construction and maintenance of some bridge projects. Other States like Gu- jarat. Haryana, Maharashtra, Tamil Nadu & West Bengal etc. are actually persuing propos- als for private investment in specific road/bridge projects. States in the North East- ern region, J&K, Punjab find lukewarm re- sponse from private sector.
9.41 In the road transport sector, Path Kar has been abolished. Government are considering the proposal for uniform Motor Vehicle Taxa- tion in the States; However, the proposal is not yet finalised. States of Andhra Pradesh, Ma- harashtra and Tamil Nadu with 100% nation- alisation of road transport services are not enthusiastic to denationalise their routes. North Eastern States have mentioned that pri- vate bus operators are not forthcoming to op- crate transport services in their States. However, States of Haryana, Madhya Pradesh, Punjab & Uttar Pradesh etc. have been suc- cessful in inducing private bus entrepreneurs to operate on certain selected routes.
9.42 The Planning Commission has taken a decision that incremental road transport traffic demand should be met through private bus operators and that State Road Transport Un- dertakings should not augment their fleet for this purpose. Accordingly, there is no need for State Government capital contribution to their respective State Road Transport Corpo- rations. As regards funds for replacement of over-aged buses, the same should be met from the Depriciation Reserve Fund. This policy is being uniformally followed for all the State Road Transport Undertakings except for those operating in difficult and remote areas where private operators are reluctant to operate.
9.43 As at present, there is excess staff in State Road Transport Undertakings. States have been advised during Plan discussions to con- sider evolving suitable voluntary retirement scheme to bring down the staff strength. Very little seems to have been done on this account.
9.44 The maritime States like Gujarat have succeeded in involving private sector in the development of minor ports. Other States are also actively pursuing proposals for private Investment in their ports.
Power 9.45 In September, 1991, the Government of' India has announced private sector policy for investment in Power Sector in order to bring an additionality of resources in capacity ad- dition programme in the Electricity Sector. Government has formulated a scheme to in- crease greater participation by private sector enterprises in electricity generation supply and distribution, The scheme widens the scope of private investment in the Power Sector and has modified financial, administrative and legal environment for the private enterprises to make investment in the Electricity Sector at- tractive. The new environment is based on the amendments to the electricity legislation Oil which Electricity Sector in India is based.
9.46 In line with the Policy announced by the Government of India for private investment in the Power Sector a number of State Electricity Boards have signed MOUs with the Indian as well as foreign private investors for setting up power generating stations in the respective states.
370
9.47 Brief details of the MOUs signed for the Power projects by each state is given below :
(MW)
9.48 Some States like Orissa and Meghalaya
have taken up plans for restructuring of State
Electricity Boards. While Orissa plans to have
separate Corporations for thermal generation,
transmission & distribution and hydel genera-
tion with 100 % state ownership to start with.
Meghalaya is contemplating privatisation of
the operations of the SEB. States like U.P. and
Haryana are reported to have been formulating
plans for restructuring of the operations of the
State Electricity Boards.
Industries
9.49 With the liberalisation of the Indian econ-
omy which commenced in July 1991 with new
Industrial Policy, and the other economic re-
forms, many States have brought out new in-
dustrial policy in line with the new National
Industrial Policy, 1991 and are taking meas-
ures to simplify various procedures, rules, en-
actments and State laws for making it easy for
the entrepreneurs to invest for setting up indus-
trial units both in the large & medium indus-
tries and the VSI sectors. Rajasthan has also
announced new mineral policy in line with the
new National Mineral Policy - whereby pri-
vate sector will be encouraged to make invest-
ment for commercial exploitation of minerals
such as base metals, iron ore, etc., which hith-
erto were reserved for the public sector.
9.50 By and large, the thrust of new industrial
policy brought out by the States is on encour-
aging private sector to set up industries based
on comparative advantage available in the
States and also ensure a balanced regional
development through targetted industrialisa-
tion of the backward regions/districts and ar-
eas. The States are also providing. various
incentives to private entrepreneurs for encour-
aging them to invest in the States. While, by
and large, various subsidies hitherto being
made available to private entrepreneurs for
setting up large and medium industries are
being withdrawn, subsidies such as for power
capital investment, transport, raw materials
particularly in the North East States, etc. will
continue to be available to private entrepre-
neurs forsetting up village and small industrial
units as a matter of policy.
9.51 The thrust of the new State policies would
be on developing industrial infrastructure, in-
cluding industrial estates, growth centres, ex-
371
port promotion industrial parks, etc. inter-alia
for encouraging direct foreign investment in
the States.
9.52 The States are also encouraging private
sector including multinationals to make in-
vestment in industrial infrastructure such as
roads, power, etc.
9.53 The States are taking measures to tackle
sickness of the State level public enterprises -
which also includes disinvestment of poten-
tially viable units and closure of potentially
non-viable units. The progress reported from
the States of Andhra Pradesh, Maharashtra,
Gujarat, TamilNadu, Kerala, Rajasthan, Mad-
hya Pradesh in this regard is quite impressive.
Besides, States are encouraging modernisation
and upgradation of technologies of the existing
State public enterprises for making them inter-
nationally competitive. Special incentives are
being made available for this purpose.
9.54 In order to have better interaction with
investors, States such as Rajasthan, Haryana,
West Bengal, Maharashtra, Gujarat, Andhra
Pradesh, etc., are organising regular seminars,
symposia and conferences. Across the board
discussions with the entrepreneurs have also
been made a regular feature by many States for
sorting out problems regarding various clear-
ances. A significant achievement in this regard
is reported from the States such as Haryana,
Rajasthan, Maharashtra, Gujarat, Andhra
Pradesh, Kerala, Tamil Nadu, etc. A single
window clearance mechanism has been intro-
duced in West Bengal.
9.55 As a matter of new industrial policy, the
State Governments would only play a promo-
tional and facilitating role in future for indus-
trial development and encourage private sector
to make investments in setting up industrial
units
9.56 In order to provide up-to-date informa-
tion to entrepreneurs on industrial climate pre-
vailing in the States incentives and subsidies
available, procedures required to be followed
for getting various clearances and agency(ies)
to be approached, etc., many States are regu-
larly publishing brochures and using other me-
dia.
ANNEX - 9.1 ANNUAL PLANS - 1992-93 TO 1994-95 - APPROVED/REVISED/EARMARKED OUTLAY - STATES/UTs