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Toeing Prime Minister Manmohan Singh's view that annual average annual growth was unlikely to exceed 7 per cent in the Tenth Plan, commission's deputy chairman Montek Singh Ahluwalia also pitched for "massive" infrastructure investments to put India on 8.0 per cent growth trajectory.
"One of the areas where corrective policies are urgently needed is agriculture, where it is absolutely essential to reverse the deceleration witnessed in the years after 1996," he said addressing the national development council.
Asking the government to "re-think" the effectiveness of current strategies both in irrigated and dry land areas, he indicated the need for imposing user charges since the present water charges were only one-fifth of the operations and maintenance costs and rural poor had not benefitted from it.
Observing that free or very cheap power was contributing to the problem of excessive withdrawal of ground water, Ahluwalia said a mere ban on new tube-wells would not help since it will give monopoly to existing pump owners.
Reminding that the mid-term appraisal had called for a more rational electricity pricing, he said it also suggested electricity for farm sector should be priced differently in areas where ground water has been severely depleted.
"The policy of subsidising micro-irrigation should also be linked to groundwater status so as to promote these systems where groundwater depletion is most serious," he said.
The corrective action in farm sector, Ahluwalia said was necessary due to the fact that agricultural growth had decelerated to below 2.0 per cent after 1996 from 3.2 per cent from 1980-81 to 1995-96.
Finding that it was a necessity to develop a coherent strategy for water conservation and management in the rain-fed areas, Ahluwalia reminded that in the past the country had many watershed programmes, aimed at conserving through check dams, ponds and artificial recharges of wells.
"But these schemes have suffered from a multiplicity of departments handling them" apart from poor knowledge inputs into the programme design and inadequate involvement of the community, he said.
The total land to be treated under watershed approach was estimated at 107 million hectares, of which 29 million hectares has been treated till the end of the ninth plan, he added.
Referring to "massive" infrastructure investments needed in power, roads, ports, airports and railways, he said this called for innovative action both the centre and the states.
"Public investment in infrastructure must be increased but the total investment needs of these sectors in the years ahead are so large that they cannot be met by replying on public resources alone," Ahluwalia cautioned.
He said infrastructure inadequacies in rural and urban areas adversely affect the country's ability to compete with imports and to penetrate export markets.
On the labour sector, he said employment generation was not up to expectations and that organised employment had fallen on absolute term in the last three years.