This has been now brought down to 6.5 per cent. The best hope is that GDP will grow by 6 per cent this year, the second year of the plan. But growth in 1998-99 could be lower.

Chances are that a year from now, the average annual growth target will be taken below 6.5 per cent; this, in turn, will mean that the GDP growth projection, now 7 per cent a year for the remaining three years of the plan, will be cut.

The claim that budget support to the plan has been retained at Rs 3,74,000 crore at 1996-97 prices could be wishful thinking. Tax revenues are not growing as planned. In 1997-98 tax revenue as a proportion of the GDP was 10.15 per cent, lower than 10.37 per cent in 1996-97.

This year excise collections are running well behind target,reflecting, among other reasons, the slack in industrial growth. Customs revenues continue to elude buoyancy. Little improvement can be expected in the tax-GDP ratio this year; the 11.5 per cent target for 2001-02 seems a pipe dream.

The Prime Minister's decision to raise budget support to the plan by Rs 5000 crore for special schemes was an act of bravado. The additional support has been cut. The special schemes may still be pursued, but at the expense of investment in other areas. The latter will come under a severe squeeze once aggregate budget support to the plan takes the predicted cut.

On the cards is a reduction in the outlay of central public sector enterprises. This could be severe. Their ability to raise internal and extra-budgetary resources has come under strain because of the lingering weakness of the capital market.

It is futile to expect strong budgetary support to the plan to kickstart flagging industrial growth. It is no secret that the fiscal deficit target of 5.7 per cent has beenexceeded. Forcing plan expenditure, in the face of declining tax revenues, will enlarge the deficit; and this could fuel inflation. The prognosis is that the government has little maneuverability in using the plan to rev growth. The ninth plan will take cuts every year.

This requires private investment to make good the shortfall in public investment to keep aggregate investment going. But private domestic investment shows no signs of regaining bounce; and foreign investment remains coy. Deficient investment makes plan growth projections meaningless.