India’s development story is work-in-progress, says PM

At his last meeting as the ex-officio Chairman of the Planning Commission, Prime Minister Manmohan Singh was told that the economy is in a delicate situation with no major signs of recovery.

A member of the Commission, who was present at the meeting, told Business Line that soaring crude oil and gold prices and trade not picking up have affected the economy.

Singh was given a presentation by members of the Commission at its last internal meeting, on Wednesday.

The Planning Commission plays an important role in facilitating policy formation and its term expires at the end of the Government’s tenure.

In his opening remarks, the Prime Minister spoke of the challenges the economy faced. He acknowledged that India’s development is a “work in progress… there is a lot of distance that is still to be covered”.

Though no growth projections for the current fiscal (2014-15) were made at the meeting, the general perception among analysts is that the economy is likely to grow at 5.5 per cent against 4.9 per cent in 2013-14.

The price at which Indian oil refiners buy crude stood at $106.92 a barrel on April 29 after touching a low of $102/barrel at the beginning of the month. Gold prices, though below $1,300 per ounce, touched a high of $1,325 in mid-April.

In 2013-14, exports missed the target of $325 billion after declining by over 3 per cent in March. Imports also declined by over 2 per cent in March. Export-import figures for April will be released in the second week of May.

On the current account deficit (CAD), the member said that it could be contained at $32 billion in 2013-14, but maintaining it at even this level will be difficult.

He said the new Government would have nine months in the current fiscal to take decisive actions on overall policy, but every thing will depend on what kind of ‘stability’ the Government enjoys.

In his speech, which was seen as a farewell address to the Plan panel, the Prime Minister said: “The external world is changing rapidly. The structure of the economy and the role of the state in the economy are also changing. … we need to reflect on what the role of the Planning Commission needs to be in this new world.”

The Commission, Singh said, needs to evaluate its approach to problems and challenges in the evolving economic scenario.

Expressing satisfaction over the working of the Planning Commission during the UPA’s 10-year rule, Singh hoped that it would “subject itself to a critical review and continue to play a leading role in the policy debate in government and in the development of our nation”.

The Prime Minister said that the total gross budgetary support (resources for Central and State plans) in 2004-05 was ₹1.32-lakh crore and in the current year it is expected to be around ₹5.5-lakh crore.

“I sometimes wonder at this massive expansion in resources and the impact that this could have if used efficiently,” he said.