The Commission meeting has a large number of issues for discussion including the review of the integrated energy policy but the severity of the drought and the steep rise in the prices of essential items, will certainly dominate the discussions since drought has covered about half of the agricultural districts of the country and the rainfall deficiency varies from 26 per cent to as high as 37 per cent in different parts of India. The intensity of the drought has made many of the budget projections difficult to achieve, and it is quite likely that the growth rate in the manufacturing sector will be adversely affected again.

For the Government, there is a fear that there can be drought driven inflation in the economy and in that event, Indian Government's optimistic projections of coming out of the process of slowdown faster will be belied. India last suffered a drought in 2002 and the record of normal and good monsoons after that is being broken. This will make the task of government's macro management difficult hampering the growth process in the economy.

According to experts, rice will be most adversely affected in terms of production this year. This will have serious repercussions in the supply position in the market as some of the surplus states have been hit most by rain deficiency. Punjab, Andhra Pradesh, Uttar Pradesh and Chhattisgarh which contributed close to three fourths of all rice procured during 2007-08 marketing year, have so far experienced a deficiency in rainfall varying from 30 per cent to 60 per cent. A study made by well known economists Dr. C.P. Chandrasekhar and Dr. Jayati Ghosh observes that with the fall in output likely to push up market prices, there is every possibility that the farmers would prefer to sell in the market where prices are likely to be higher than the floor set by the minimum support price.

In that event, procurement is likely to be low but demand from the public distribution system is set to rise in the wake of increase in market prices. This study then mentions that once the stocks with the Government deplete, this will trigger speculation based on inflationary price expectations, setting off a price spiral. Already the food prices are high with the prices of pulses hitting the roof, virtually beyond the means of the middle class, not to talk of the poorer sections. The Government has to discuss the strengthening of the public distribution system and to plug the existing gaps in the delivery system to meet the exigencies of the situation.

While the drought situation is the most urgent and priority issue for the planners, other issues of consequence to the economy will get attention at this September 1 meeting. The controversy over gas allocation and pricing has given a bad name to the Government in the context of the battle between the Ambani brothers. The image of the government abroad has also been tarnished and the Prime Minister is really upset at the continuous mudslinging between the two brothers dragging the Petroleum Ministry in the family feud. The Planning Commission members are expected to discuss the pros and cons of the issue in the context of the integrated energy policy which has already been approved and on which implementation work is on.

The Prime Minister will be meeting his Planning Commission members after just one hundred days of the functioning of the second UPA Government. Agricultural growth and expansion of infrastructural facilities have naturally got priority attention of the Government. Dr. Singh and the other senior cabinet ministers who will be attending the full meeting of the Commission will seek the views of the Commission members on the programmes which have already been implemented by the new UPA regime.

In the area of infrastructure, road construction is getting high focus since the Government has already announced that road projects worth Rs. 200,000 crore would be awarded over the next two years. The target for highway construction has also been revised upwards from the present 1500 km per year to 7,000 km per year. The Government has also announced that all infrastructure projects would now be reviewed quarterly by the cabinet committee on infrastructure and that half yearly progress reports will be vetted by the Planning Commission. This is supposed to clear matters which involve different departments of the Central Government as well as the state governments quickly.

The reconstituted Planning Commission continues to be headed by Dr. Montek Singh Ahluwalia as the Deputy Chairman while the members include the minister of state for planning V. Narayanswamy, B.K. Chaturvedi, Dr. Saumitra Chaudhuri, Dr. Syeda Hameed, Dr. Narendra Jadhav, Dr. Abhijit Sen and Dr. Mihir Shah. (IPA)