Daunted by economic slowdown and mounting fiscal deficit, government is to work out modalities for raising tax-GDP ratio by 2.5 per cent, step up annual disinvestment target to Rs 16,000 crore and raise investment ratio by at least eight per cent by the end of Tenth plan.
Planning Commission Deputy Chairman K C Pant will have detailed discussions with the Finance Minister Yashwant Sihna soon after Sinha's return from United States in the middle of next week. The crucial meeting is being held in the backdrop of the draft approach paper for the Tenth Five Year Plan (2002-07), which was released recently to elicit views from experts on the strategy for pushing up annual growth to eight per cent. Planning Commission sources said the falling tax-GDP ratio has been a major concern of the government even though it had improved marginally to 9.2 per cent in 2001-02. The Tenth plan proposes to raise it back to at least 11.7 per cent by 2006-07 in a bid to reduce the fiscal deficit from the present level of about five per cent of GDP to about 2-2.5 per cent of the GDP by the end of the Tenth Plan in 2007. Bureau Report