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Pant warns of serious upshot in failing 8% growth

The Planning Commission on Saturday exhorted states to help contain the staggering Rs 900 billion revenue deficit and warned that any slippages in resource mobilisation to achieve the proposed 8 per cent growth target in the Tenth Plan will have serious consequences for the economy.

"The consequences of inaction are too serious to contemplate. Not only will growth falter and unemployment rise, but it could well threaten the cohesiveness of our social fabric" Deputy Chairman, Planning Commission, K C Pant, told the National Development Council meeting.

Expressing concern over the significant deterioration in fiscal position of both Centre and states, specially after the implementation of Fifth Pay Commission, Pant said the deficit from current revenue was a whopping Rs 900 billion as against a mere Rs 50 billion at the beginning of the 1990s.

The ratio of revenue deficit to the fiscal deficit had also increased sharply from 20 per cent in 1993-94 to 65 per cent in 1999-2000, he said adding that "we are now borrowing more and more just to meet our current expenditure on salaries, interests and subsidies".

"We see that there has been a 200-fold increase in the pension bill of just 15 major states. It has gone up from around Rs 1 billion to nearly Rs 190 billion in the last 25 years," he said.

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