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Speech of Shri N. CHANDRABABU NAIDU, Chief Minister of Andhra Pradesh
49th N.D.C. Meeting, 1st September 2001, Vigyan Bhavan, New Delhi.


Hon'ble Prime Minister, Deputy Chairman of the Planning Commission, Union Cabinet Ministers, Colleague Chief Ministers and friends.

Let me at the outset compliment the Prime Minister as well as the Deputy Chairman of the Planning Commission for convening the forty ninth meeting of the National Development Council to deliberate on the approach to the Tenth Five Year Plan and some of the outstanding issues affecting centre-state relations. The planning process during the last five decades in our country has accelerated economic growth, substantially reduced poverty and improved the quality of life of our people. Some of the achievements stand out as examples for the other developing countries. However, certain critical areas like poverty eradication, population control and achieving total literacy need utmost priority and urgency of public action. Our development strategy should, therefore, focus on consolidating the gains, reinforcing the strengths and addressing some of the weaknesses of our past planning process through the Five Year Plans. The lessons learnt from the mid-term appraisal of the Ninth Five Year Plan should also be taken into consideration while formulating the strategy for the Tenth Five Year Plan.

2. The Tenth Five Year Plan aims at achieving an average growth rate of 8% during the plan period of 2002-2007 as against an average growth rate of 6.5% achieved during the Eight and Ninth Plan periods. We have envisaged a GSDP growth rate of over 8% during the same period in our Vision 2020 which has articulated the development goals for the state. The GSDP growth rate in our state has been 6.75 % during the year 2000-2001 and we are determined to step up the growth rate to a level over 8% during the next five years. Structurally the agriculture sector contributes about one third to the GSDP currently, though the sector is growing today at an average growth rate of about 4% in our state which we propose to step up to a level of 6% during the next five years. This sector is the backbone of the state's economy as over 70% of our population depend on agriculture for their livelihood. Such an aggressive growth rate is possible to achieve by reformulating our strategy focusing on dry land farming, water conservation, crop diversification, increasing productivity, reduction in the cost of cultivation and making agriculture globally competitive with suitable policy initiatives. We have launched a massive programme called Neeru-Meeru for water conservation with the active participation of the farmers which has been quite successful. I strongly endorse the suggestion made in the approach paper for recognising agricultural development as a core element of the strategy for the Tenth Five Year Plan. The impact of global competition on the farmers should also be incorporated into our strategy. Similarly, steps should also be taken to eliminate gender discrimination in the payment of minimum wages in the agriculture sector wherever it exists as it has a vital bearing in our poverty eradication efforts.

3. The goal of doubling the per capita income in the country within the next ten years is highly laudable. A target of an average growth rate of 7.6% is envisaged in our Vision 2020 during 2000-2005 and the per capita income growth rate has been 5.72% in our state during 2000-2001. However, the goal of doubling per capita income in the next ten years will be possible to be achieved provided we are able to bring down population growth substantially in the country.

4. Rising unemployment has been a key issue in our development strategy. We need to focus our attention on fully exploiting the existing potentialities in all the sectors of our economy with a time bound programme of concrete action. Producing quality manpower for attracting global opportunities will also be a challenge for us and we need to restructure our educational curricula at various levels accordingly. We have launched an Employment Generation Mission at the state level to address such issues in our state.

5. Improvement in the health and nutritional status of our people has been in the core of our development strategy. Some of the demographic indicators have been showing positive trends in the recent past. An average growth rate of population of 0.8% has been envisaged in our Vision 2020 and a growth rate of 1.3% has been achieved during the period 1995-2000. The population growth has declined significantly during the decade of 1991-2001 as compared with 1981-91. Our state will perhaps be able to achieve the total fertility rate of 2 in the next two years. However, we would like to focus our attention on reducing infant mortality rate, maternal mortality rate, under five mortality rate and malnourishment.

6. Development of human resource is extremely critical to the development of any society. The percentage of literacy has been 61.11% in our state according to the 2001 Census and we have drawn up a time bound action plan to achieve total literacy by 2005. Expansion of educational infrastructure has been our priority providing increased access to the people within a radius of 1 Kilometer from every habitation. Construction of school buildings and provision of teaching learning materials in all the schools, recruitment of additional teachers and management of schools by the parents are some of the recent core interventions in the education sector. Special attention has been given to the enrolment of children and their retention focusing on the girl child. A special campaign has been launched called Akshara Sankranthi to make 80 lakh adult illiterates into literates within a time bound programme which has yielded significant results. A special programme has been drawn up to enroll 35 lakh children in the age group of 5-14 years who are outside the school through bridge courses. I hope we will be able to achieve total literacy in the state by 2005 as envisaged in our Vision 2020. Elimination of child labour will be our top priority and time bound action plans have been drawn up accordingly.

7. Supply of potable drinking water for all the households and provision of sanitation facilities have been our main concern in the development strategy of our state as water and sanitation are extremely critical for eliminating some of the diseases and improving the quality of life of our people. Our goal is to provide safe drinking water in all the habitations as per the prescribed norms by the year 2005 and specific action plans have been drawn up accordingly.

8. Macro economic growth cannot eliminate poverty unless the wealth created is redistributed in favour of the poor and the downtrodden through focused policies and targetted programmes. All our schemes and programmes need to be restructured to provide for convergence at all levels towards poverty eradication. We have constituted a Poverty Eradication Mission at the state level to bring about sectoral convergence at all levels and also to study the best practices for replication with suitable modifications to suit to our requirements. Focus on the development of the weaker sections particularly the schedule castes, the scheduled tribes, the backward classes and the minorities will be central to our poverty eradication strategy.

9. Environment conservation need to be mainstreamed into our development strategy during the Tenth Five Year Plan. Protection of forest resources through people's participation, pollution control and action against the environmental degradation should be built into policy and programme formulation at all levels. We have launched the Andhra Pradesh Clean and Green Campaign in September 1998 to create awareness among our people on environment conservation which has been successfully implemented in the state.

10. Development of infrastructure like power, roads, ports, railways and telecommunications is extremely critical to our development process. The approach paper has highlighted the existing gaps and the need for capacity upgradation during the next five years to meet the increasing demands. There is an urgent need to critically review the existing policies and procedures to make them investor friendly as it is crucial to public-private collaboration in infrastructure development. Suitable policy and regulatory framework will have to be created providing transparency and accountability. Rural connectivity is extremely important and a time bound action plan need to be prepared to connect all our villages with all weather road facilities during the next five years and the required resources should be mobilised accordingly.

11. Expansion or communication infrastructure should be accorded top most priority. Exemption from the payment of central and state taxes and duties should be given for the import of machinery and equipment to promote e-governance, tele-medicine, distance education and other IT enabled services benefiting the common man.

12. In view of the importance of fiscal reforms at the state levels, it is proposed in the approach paper to create a fund at the Planning Commission to augment plan resources of those states who agree to wipe off their revenue deficits in a period of five years and improve governance. State specific targets are proposed to be laid down in different sectors and development assistance is proposed to be linked to performance. The above proposal needs to be seriously considered and debated for evolving a suitable formula of allocation based on performance. Certain states have mobilised additional resources for poverty eradication and social development which has significantly added to their debt burdens. Such states have been penalised for their good performance in reducing poverty as the allocation of central funds in certain sectors have been linked to poverty criteria. It is suggested that the population criteria should be freezed to the level of 1971 as per the existing formula and at the same time release of central assistance should be linked to performance. Poverty estimates as per the Planning Commission Task Force report of 1987-88 should be freezed for the allocation of central funds under different schemes wherever poverty criteria are taken into consideration. The existing interest rates of the central loans need to be reduced to a reasonable level as the repayment of such loans at the current rates of interests, particularly on small savings, has severely strained the limited resources available with the states.

13. I am happy to note that governance reforms have been considered as a critical element in our development strategy in the approach paper to the Tenth Five Year Plan. The role of the Government has to )e reexamined and it has to be transformed to play a facilitating role in economic development. The Government will need to shift its spending from unproductive areas towards achieving high priority developmental goals. We have introduced Performance Monitoring and Evaluation System at all levels in the government with clear cut goals and targets based on Vision 2020. Allocation of budgetary resources to each department has been linked to performance outcomes and accordingly outcome indicators have been identified for each department for measuring the performance of employees at all levels.

14. The people centred development process launched in the state in January 1997 has provided the opportunity of tapping the latent capabilities of our people and the communities. Gram Sabhas are organised three times in a year providing the forum for the people to identify and prioritise their felt needs. The government functionaries and the institutions at the grass roots level have been made accountable to the people. Large number of community works have been undertaken with the contribution by the people. Exhibitions have been organised as a part of the Gram Sabha to demonstrate to the people on the achievements made in the village in some of the key areas and sectors like agriculture development, population control, literacy, health and sanitation, water conservation, women and child development. The proposal in the approach paper to raise community contributions at the rate of 15% in general areas and 5 % in tribal areas may be uniformly adopted for all the development schemes and programmes to create a sense of ownership and participation among the people Instead of limiting to only rural development schemes.

15. Participation of the people is exremely important for the successful implementation of our plan schemes and programmes. The participation of the stakeholders through their self help groups in our state has been quite successful in reducing leakages in the delivery system while creating a sense of ownership among the people benefiting from such development schemes and programmes. Self help groups like Water User's Associations (WUA), Watershed Development Committees (WDC), Vana Samrakshana Samithis (VSS) have been organised for the development of natural resources. Similarly, self help groups like Development of Women and Children in the Rural Areas (DWCRA), Development of Women and Children in Urban Areas (DWCUA), Chief Minister's Empowerment of Youth (CMEY) have been organised for employment generation. Mother's Committees and Village Education Committees have been organised for human resources development. Elections to the Local bodies have been completed and they are going to be further strengthened with suitable devolution of functions, functionaries and finances.

16. The methodology recommended by the Expert Group for estimation of poverty ratio of states was highly erroneous and distorted particularly in respect of our state as the price index used under this methodology is significantly influenced by the large food subsidy programme being implemented by our state government. The state's entitlement based on poverty ratio should not be reduced on account of a programme financed by the public exchequer. Moreover, I once again strongly contest this methodology of poverty estimation mainly because the state specific price index used for our state has no built in neutralization for the price depressing effect of the very huge subsidy programme implemented by our state government. As such the poverty ratio of our state under this methodology is an underestimate.

17. The Planning Commission has frozen the population for devolution of funds under normal central assistance with respect to 1971 census as the base year. A similar freezing also called for devolution of funds under various anti-poverty programmes. Secondly, the performance of the states under various anti-poverty programmes should also be taken into consideration and better performing states should be given certain special incentives as is being done under the Mukherji formula for devolution of central assistance. More over, the financial responsibilities of the state governments have increased enormously over the years. Keeping these facts in view, I once again strongly recommend that the poverty ratio as per the Task Force methodology of 1987-88 should be frozen for considering the devolution of funds under various anti poverty programmes.

18. I would like to reiterate my position which T took on many earlier occasion.. at the meetings of the National Development Council and the Inter State Council that all the Centrally Sponsored Schemes should be abolished altogether. The full central share may be transferred to the states as grants to implement the schemes and programmes which are of priority and importance to the states. This would be in the true spirit of cooperative federalism which all of us are committed to foster. The states should be given the choice, freedom to devolve part of the funds so transferred to the states, to the Local Bodies to implement the programmes and schemes responding to the local felt needs. In order to cushion the States against inflation and future needs of a growing economy, the devolution of resources should be related to earmarking a desirable level of percentage G.D.P. for such transferred schemes which should in no case be less than the current percentage of G.D.P. spent on such schemes. Devolution of resources in future years should progressively increase towards the desirable percentage of G.D.P. Inter-se allocation to states may be done as per norms established by the Planning Commission from time to time.

19. The states are put to serious disadvantages whenever decisions are taken by the Central Government to introduce new schemes during the plan period itself resulting in reallocation of the limited resources available with them to provide necessary matching assistance. Such decisions also affect the implementation of state's priority schemes and programmes. Moreover, transfer of schemes introduced by the Central Government to the states at the end of the plan period also adds to the liability of the state governments who are seriously resource constrained. The proposal worked out by the Planning Commission in consultation with the concerned Central Ministries and Departments to transfer only 21 schemes with an outlay of Rs. 3 88 crores out of 25 6 schemes currently under implementation as Centrally Sponsored Schemes with an outlay of Rs.24460 crores should be reconsidered.

20. Special category status for allocation of central assistance to state plans has been accorded in the past to the states that are characterised by a number of features requiring such special central consideration. These features include hilly and difficult terrain, low population density, sizeable share of tribal population, strategic locations along borders with neighbouring countries, economic and infrastructural backwardness and non-viable nature of state finances. The planning process in the country has not so far been able to address adequately the specific requirements of the backward areas an^ regions in different states which need a special focus and attention. There are areas which are chronically drought affected and there are also areas which are affected due to extremist activities. These disparities in the levels of development will have to be eliminated and such areas should be considered under the special category for providing suitable central assistance for their holistic and integrated development. I suggest strongly that special category status should be given to such areas in all the states instead of including states as a whole under the special category.

21. It is pertinent to debate and consider some of the critical issues in the centre-state relations while formulating the development strategy for our Five Year Plans in the new millenium. Greater devolution in favour of the states within the spirit of cooperative federalism is absolutely essential for the successful implementation of the various development schemes and programmes and for achieving our national goals. I would like to suggest the National Development Council to workout a frame work for such a devolution in favour of the states.