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Mid-term plan review prescribes speeding up divestment

Concerned by the mounting fiscal deficit, the mid-term ninth plan review has prescribed speeding up of the divestment programme, zero-based budgeting and widening of tax base to reduce interest liability and expenditure.

Making detailed analysis of the resource position of both centre and states, the voluminous report blamed the shortfall in mobilisation of budgetary resources for the Plan in the last three years leading to increased borrowing, which has made the deficit "excessive and beyond sustainable levels."

"There is need to bring down fiscal deficit and the rate of inflation which will help to reduce the real interest rates," it said adding deficit should be brought down through resource mobilisation efforts and austerity.

Giving policy directions, the report said the second generation reforms should cover all sectors and percolate down to states and wanted the industrial sector to respond to the challenges and opportunities posed by the WTO regime.

It said services should be appropriately priced to cover the full cost of operations to attract private initiative in Infrastructure besides introduction of regulatory mechanism to oversee pricing of services and other issues.

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