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Address by Shri Keshubhai Patel, Chief Minister, Gujarat
49th N.D.C. Meeting
, 1st September 2001, Vigyan Bhavan, New Delhi.


Respected Prime Minister and Colleagues,

I am happy to be here to participate in the deliberation of the 49th meeting of the National Development Council (NDC).

The most important item on the agenda today is the Approach Paper to the Tenth Five Year Plan (2002-2007).

Economic reforms were started in the country in the last decade. In the context of the globalization, it is our common aim to have an economic structure in place so that-India can become a leading developing country, economically, in the World in the coming years. I welcome the draft Approach Paper formulated by the Planning Commission and shall present my views on some of the important points in the context of the progress made by Gujarat in these fields.

Rate of Economic Growth in the Country

The Approach Paper has proposed a GDP growth rate of 8 per cent as against the present trend growth rate of 6.5 per cent. The growth rate of 8 per cent may appear to be rather ambitious but I firmly believe that if we take necessary steps to increase agricultural production and develop agro industries, this growth rate can be achieved with ease.

Progress of the Ninth Five Year Plan

I take pleasure in announcing that for the Ninth Five Year Plan against the targeted outlay of Rs. 28,000 crores, Gujarat has provided an outlay of Rs. 31,300 crores i.e. more than 100 per cent.

Earth Quake Relief

Gujarat has spent Rs.1450 crores towards relief after the devastating earth quake. Rs. 500 crores have been paid as first installment towards reconstruction/repairs of 9 lakh houses which were destroyed or damaged.

The debris of the structures that were destroyed in the earth quake has been removed.

Temporary arrangements have been made for 10,000 school rooms which were destroyed and regular education work has started in full swing.

Ample precautions were taken after the earth quake to see that no epidemic broke out. Further ail primary health centres, community health centres and other health institutions damaged or destroyed during the earthquake have been re-started, wherever necessary in temporary structures.

Fifty Thousand agriculturists have been provided input kits so that they can take their normal crops this season. Artisans have also been given financial help and kits to enable them to re-start their work.

The Government has announced packages for reconstruction of houses and rehabilitation of agriculture, commerce and industry.

Financing Earthquake Relief

The Asian Development Bank and the World Bank have sanctioned loans of 900 million dollars for earthquake rehabilitation. I would request the Central Government to transfer these funds to the State at the same rate of interest at which these funds are received from the International Financial Institutions. These loans will be used for humanitarian relief. Calamities on the scale of the recent Kachchh earthquake rarely occur in the history of a country. The ADB and the World Bank are providing the assistance on IDA terms and charging a rate of interest of 1%. The Govt. of India proposes to charge a rate of interest of 8.5% on this aid. The State Government is hardly in a position to pay this high rate of interest and would request for a special consideration by the Central Government.

Relief Against Natural Calamities

As has been mentioned earlier, Gujarat faces natural calamities repeatedly. The areas of Saurashtra and Kachchh repeatedly face either cyclone or drought. This year we have additionally suffered from the calamity of earthquake. The State has a Calamity Relief Fund for calamities of normal severity and for calamities of rare severity, National Contingency Relief Fund provides assistance. However, our experience is that during such calamities, the aid received from this Fund by the State is quite inadequate compared to the actual requirement. I would urge that the Central Government should provide adequate finances to cope up with such calamities fully.

Centrally Sponsored Scheme

The National Development Council has constituted a Committee to consider the question of transfer of Centrally Sponsored Schemes to the States. I firmly believe that CSS as far as possible should be transferred to the States but at the same time the State should continue to get the funds for this scheme from the Central budget. Further, such transfer should provide for escalation due to inflation and time bound increases. If the N.D.C. decides to continue with some Centrally Sponsored Schemes after considering the report of the committee, the Centre should not insist on a common administrative structure for the whole country. The States should be free to make changes to suit their special administrative circumstances.

Agricultural Development

We are generally in agreement with the proposed strategy for agricultural development in the Approach Paper. Higher investment in irrigation, roads, electricity generation etc. will certainly help to accelerate agricultural development. At the same time, the issue of reduction in subsidies needs deep consideration. Many fields still need subsidies for growth. Agriculturists should get proper returns for their cash investment as well as hard labour. We have attained self sufficiency in food in the last fifty years. This hard won achievement has to be conserved and the food security system has to be consciously monitored.

The Approach Paper has rightly considered agriculture as a core sector. In this context, I may mention that Gujarat had already formulated a Gujarat Agro Vision 2010 for agricultural development in the coming 10 years and has started its implementation from this year. The main programmes included in this Vision are land reforms, water shed development, increase in irrigation potential, and use of drip irrigation systems, special emphasis on horticultural development, use of biotechnology, improved seeds, bio-fertilizers, strong marketing structure and proper preservation and storage of agricultural produce etc.

So far, we have concentrated our attention on agricultural inputs like seeds, fertilizers, irrigation etc. However, we are losing 35 to 40 per cent of food-grains, fruits and vegetables due to lack of quick agro-processing facilities and shortage of warehousing and cold-storage. To remove this deficiency, Gujarat has planned to create warehousing, cold chains, agro-processing Complexes and marketing facilities under the programme of Post Harvest Technology. This is an important element of Gujarat's Agro-Vision 2010.

Under the horticultural development programme this year the farmers will be supplied grafts of fruit trees like mangoes. Under this programme, we have also planned to increase. production through use of bio-technology. For instance, if mangoes, cheekoos and bananas etc. can be made exportable by the use of biotechnology, the large market in Arabian Countries and in Europe can be exploited. Gujarat Agricultural University has undertaken this project. A Bio-Technology Council has also been set up by the State.

I welcome the importance given in the Approach Paper to Animal Husbandry, Dairy and Poultry Development. It is our experience in Gujarat that during Scarcity years the cattle breeders are unable to maintain their cattle in the absence of adequate fodder. We therefore, plan to create grass banks in the good monsoon years by storing grass, green fodder and dry fodder. The grass depots will be dispersed widely over the scarcity affected areas.


We propose to achieve rapid progress in the multi-purpose Inter-State Sardar Sarovar Project through the co-operation of all participating States.

The Approach Paper mentions people's participation in the field of irrigation. Gujarat has taken an initiative in this direction through Sardar Patel Participatory Water Conservation Scheme.

Under this scheme, we have constructed 15,000 check-dams in the last two years in the areas of Saurashtra and Kachchh, which will not be served by the Narmada water. These check-dams are expected to provide irrigation to 1,50,000 hectares of land. We propose to continue with the scheme during the 10th Plan.

Gujarat has also made appreciable progress during the last three years under the Accelerated Irrigation Benefit Programme. (A.I.B.P.)

It is necessary to renovate the old existing irrigation schemes to get the full benefit of their irrigation potential. Central Govt. should draw up a new scheme for this apart from A.I.B.P. Further for better utilisation of the irrigation potential in the command areas, the Central Scheme for Participatory Irrigation Management needs to be revamped. I would also request to formulate a new Central Scheme for the renovation of minor irrigation works like village tanks, percolation tanks and check-dams.

Poverty Alleviation Programmes

The Central Government has regrouped various Poverty Alleviation Programmes under Swam Jayanti Gram Swarojgar Yojna. As has been acknowledged in the draft Approach Paper, Gujarat has made good progress under this scheme.

Gujarat has taken effective steps for the economic and social development of families living beldw the poverty line. Thus, incidence of poverty which was 24.21% in 1993-94 has come down to 14.07% in 1999-2000.

Regarding Agenda item No.2 on the criterion for allocation of funds under major rural poverty alleviation programmes, we are of the view that the allocation should not be based only on incidence of poverty as this gives no credit to the State for its efforts in elimination of poverty. We feel that efforts made towards composite human development should also be taken as one of the factors for this purpose. It is, therefore, suggested that the criteria for allocation of funds under Major Poverty Alleviation Programmes should be as follows:

  1. 60% on the basis of the proportion of population below poverty line.
  2. 20% on the basis of efforts of the State towards poverty reduction.
  3. 10% on the basis of the needs of the pockets of acute distress covering arid/ semi-arid areas and backward hilly areas.
  4. 10% on the basis of the improvement in the Human Development Index.

Gokul Gram Yojana

Gujarat has undertaken an innovative experiment for comprehensive village development through Gokul Gram Yojana. Under this programme, we have been able to declare 9,512 villages as complete Gokul Grams by completing about 1.25 lakh works of basic amenities by ensuring keen participation and cooperation of the people in the Gokul Gram Yojana. It is proposed to cover the rest of the villages under this scheme by 2002-2003.

Forests And Environment

The forest cover in Gujarat at present is 9.61% i.e. 18,815 sq. kms, We propose to increase forest cover to 12% by the end of the 10th Five Year Plan by reclaiming degraded and waste lands. However, forest protection shall be effective only when we take care of the needs of food, fuel wood and fodder of the people living nearby.

Industrial concentration in certain areas of Gujarat without proper effluent treatment and disposal coupled with inadequate sewer drainage facilities has polluted certain rivers/nalas. We have established common effluent treatment plants in most industrial estates having polluting industries. We have taken up a project under the National River Conservation Plan for the purification of the Sabarmati river. Similar schemes have to be undertaken for Tapti and other rivers.

We strongly urge the Central Government to have a marine policy which would contain the framework to regulate vessel traffic movement in the Gulf of Kachchh and discharge of ballast from ships.

Gujarat manufactures 60% of the total salt manufactured in the country. The Coastal Regulation Zone notification of 1991 does not allow salt farming in inter-tidal areas. The amendment to the CRZ notification permitting such activities in the inter-tidal areas is needed.

Administrative Reforms

Gujarat is making rapid strides in e-governance. All districts except Kachchh have been covered under Gujarat State's Wide Area Network (G-SWAN) by the 15th of August 2001. All taluka places (except in Kachchh district) are proposed to be connected within the next three months.

All the District Collectors and District Panchayats are implementing programmes of Citizens' Charter. The Collectorates have established information galleries and computerised centres for receipt of applications. The applications can thus be monitored and their progress traced quickly. This will make the bureaucracy more responsive to the people. Lok Praharis have been appointed in certain districts to give a quick response to the complaints from the people.

Panchayati Raj Institution

Gujarat has taken initiatives for the implementation of Panchayati Raj and decentralisation of power. Forty three per cent of the State Plan is implemented through Panchayats and other local bodies. The Approach Paper has suggested that the 3 tier Panchayati Raj system should be modified to a 2 tier system. The Centre should legislate necessary enabling provisions in the Constitution and leave it to the States to decide about their Panchayati Raj set up.

Gujarat has abolished octroi in areas other than the Corporation areas to give a fillip to trade. We are raising alternate resources to compensate the local self-government bodies for the loss of octroi and even those municipalities or panchayats which were not levying octroi will be entitled to be compensated.

Social Infrastructure Development

The Approach Paper rightly focuses attention on Human Development. Gujarat's Eighth Plan provided Rs. 2250 crores in the social sector or 20 per cent of the Plan. In 1995 while formulating the Ninth Plan, we increased the allocation to Rs. 9600 crores or 34 per cent of the Plan. In the Tenth Plan we want to further increase the allocation for the social sector. Gujarat has prepared a Human Development Vision 2010 and is implementing it from this year with 41% allocation for Social Sector.

The draft approach paper lists monitorable targets for human development for the Tenth Plan and beyond. The State has planned to achieve these targets on infant mortality, maternal mortality, total fertility rate, primary school enrolment for all children for 5 years etc. even ahead of the targeted dates in the Approach Paper. Under Human Development Vision-2010 the State has planned an outlay of Rs. 48,313 crores in the next 10 years through budgetary support, institutional finances and contributions from the Private Sector.


The Government has in the past three years, taken a massive enrolment drive (Praveshotsav) and enrolled 5,26,000 children in the 1st Std. this year. The enrolment rate has thus gone up by 22.5 per cent in the last three years with the support of Village Education Committees. Parent -Teacher Associations and Mother-Teacher Associations. The drop out rate has come down from 35.40 per cent in 1996-97 to 22.30 per cent in 1999-2000. The target of all children completing five years of schooling will be achieved by 2007.

The State successfully constructed 7000 school rooms through pre-fabrication technology to reduce the shortage of school rooms. We have started an incentive scheme Vidya Sahayak to reduce the shortage of teachers for the last two years. Under this scheme primary teachers are being appointed as Vidya Sahayaks on a fixed pay of Rs. 2500/- per month for five years after which they will be eligible for absorption in the cadre of primary teachers. So far 46,000 Vidya Sahayaks have been appointed. Encouraged by the success of the scheme of Vidya Sahayaks, we have undertaken a big programme to provide employment to one lakh boys and girls this year by employing them on an honorarium of Rs. 1000/-. These persons will spread literacy and strengthen the social infrastructure in health and agricultural extension etc. in the rural areas.

Drinking Water

Drinking water is the most important problem in Gujarat. During the last two years failure of rains created scarcity conditions and water shortages in large areas of the State. We have provided water to 439 villages, 31 cities, and 4 municipalities through Saurashtra Pipeline Scheme based on Narmada and Mahi Canals. It is planned to provide 5000 lakhs litres of water per day through Maliya-Kachchh, Maliya-Morvi-Tankara-Jamnagar and Tankara-Rajkot Pipelines in the coming two years.

The State has completed the Dharoi and Mehsana Grid covering 550 villages to alleviate the drinking water problem in fluoride affected villages. The State Government has already undertaken regional water supply schemes to cover more than 8000 villages by the year 2004. By 2010, most parts of the State will be covered by State Drinking Water Grid.

I urge the Government of India to provide necessary finances for these projects from HUDCO and through Externally Aided Projects.

National Energy Policy

Gujarat has established an Electricity Regulatory Commission. A revamping programme has been drawn up for Gujarat Electricity Board with 500 million dollars aid from the Asian Development Bank.

The main fuel for electricity generation in Gujarat is coal which caters to 80 per cent of the generation capacity. Gujarat has to import this coal from Madhya Pradesh and Bihar. The price of coal is Rs. 800 per metric tonne but the transportation cost comes to Rs. 1000/- per metric tonne. This makes electricity generation very costly. In view of this, and as natural gas is available in plenty near Gujarat, Gujarat should get adequate gas at a reasonable price for power generation. At present GAIL is charging transportation cost of Rs. 1150 per 1000 cb. mtrs. through HBJ Pipeline irrespective of distance. This places Gujarat at a great disadvantage. I strongly advocate a National Energy Policy which will rationalize transportation costs of all fuels.

Gujarat should get adequate natural gas from HBJ Pipeline and from ONGC onshore fields for power generation and for industry instead of being forced to rely on coal from Bihar and Madhya Pradesh. In the absence of adequate natural gas 1500 MW generation capacity in Gujarat either remains idle or the units are forced to use costly naphtha fuel. This results in a very high electricity tariff for the Gujarat consumers.

In this age of globalization India has to compete with China and South East Asian Countries. The electricity tariff in China is reportedly less than 50 per cent of the tariff in India. If we want our Industry to compete internationally, we should urgently evolve a National Energy Policy.

Railways and Ports:

Gujarat has a coast line of 1600 Kms. and has one major and a large number of medium and minor Ports. These ports serve not only in Gujarat but also North-Western and Central India. To exploit the full potential of Gujarat's ports in the context of increasing India's share in the world trade, we announced our Port Policy in 1995 for setting up modern and world class port infrastructure with increasing participation of the private sector. As a result of this policy, the annual cargo handled on Gujarat's Ports has crossed 73 million tonnes as compared to 15 million tonnes in 1994-95. Gujarat has been able to attract Private Investment of more than Rs. 6200 crores for the development of Pipavav, Mundra, Sikka and Dahej. By the end of Tenth Five Year Plan we propose to achieve the figure of 150 million tonnes for the annual cargo handled. Of course to fulfill this target, adequate rail and road connectivity has to be provided to the Ports.

In this context I welcome the proposals for modernization and privatization of railways given in the approach paper. If the missing railway links to Gujarat Ports are completed early, Gujarat will be able to better serve the hinterland of India for export and import of goods.

Infrastructure Projects

After globalization, it was expected that sizeable private investments will flow into infrastructure projects in the fields of power, ports, roads etc. Gujarat prepared an Infrastructure Vision 2010 which is being implemented since the last three years. Under this agenda, it is proposed to complete 383 projects with an investment of Rs. 1,16,000 crores mostly through private investment. I take pleasure in informing this August House that we have completed 36 projects with an investment of Rs. 1900 crores in the last three years. 108 Projects with a projected investment of 46,630 crores are under finalization. Gujarat is unique in that we have an Open Bidding System for infrastrcuture projects which ensures Complete and Total Transparency. This has increased the confidence of the foreign investors for investment in Gujarat. We have created the necessary regulatory mechanism for the power sector and independent authorities are contemplated for Ports and other sectors.

Economic Restructuring

The Approach Paper urges the States to expedite the process of disinvestment in the public sector. The State has formulated and implemented a Disinvestment Policy under the Public Sector Restructuring Programme with the aid of Asian Development Bank. So far, 7 loss making public sector undertakings have been closed down and 4 public sector units have been amalgamated with others. 16,000 workers have been retrenched under the V.R.S. Scheme without causing undue hardship. I believe that even the Government of India has considered the Gujarat Pattern of VRS for the NTC Mills.

Gujarat is one of the States which have exercised financial discipline in incurring public debt and imposed a statutory limit on State Guarantees. The Approach Paper touches on Administrative Reforms and especially on reducing the number of employees. This is a step in the right direction. Government of Gujarat has taken an initiative in this direction and imposed a 20 per cent cut in various nontechnical cadres in the State since 1995-96. New recruitment is confined almost entirely to teachers and doctors. This has helped the State in controlling non-plan expenditure.


The rate of industrial growth in Gujarat has been as high as 11.5%. As per the report of CMIE in August 2001, Gujarat has regained its number one position among States in terms of proposed investments through I.E.M.

Many industries in Gujarat especially small scale industries have suffered in the process of globalisation. Many units have either closed down or become sick. This has in turn affected the viability of the State finance institutions. We have to create a level playing field to keep our industry viable and should take steps to prevent any ill effects through dumping by other countries. The anti-dumping hearings should be completed expeditiously.


Urbanization is progressing at a rapid pace in Gujarat with 37.67 per cent of the population living in urban areas. There are six corporations and 143 municipalities in the State. The State Government has constituted District Urban Development Authorities to prevent haphazard growth and have planned development in and around the towns and these Authorities are being given adequate funding.


In conclusion, I sincerely hope that the 10th Five Year Plan will fulfill the aim of raising India to the level of a leading developing country in the world.

Jai Hind,