Pant complimented the state for a high growth rate during the first three years of the Ninth Plan. The state has been utilising plan allocations, and the state domestic product (SDP) and per capita SDP are higher than the national averages, he added. He, however, cautioned the state against increasing reliance on borrowings. Borrowings and debts constitute 69 per cent of the resources for the first three years of the Ninth Plan.

The state should go for strong regulatory provisions backed by laws to check over-exploitation of ground water and to promote disciplined used of surface water, the plan panel deputy chief said, adding that a comprehensive water policy needs to be formulated and implemented with people's participation.

The state government should also take up rain water harvesting through traditional methods in a big way.

Pant commended the state government for preparing agro-vision 2020 to give thrust to diversification in agriculture sector towards high value commercial crops and other allied activities by building up infrastructural support. He said farmers need to be protected from recurring droughts by popularising water management practices. The plan panel keen on provide funds for publication of an HRD report which the state government prepared recently.

Briefing the commission on the measures taken by the state government for augmenting resources, Patel said that the tax incentive policy had been discontinued, uniform floor rates in sales tax had been fixed, and a surcharge of 10 per cent on sales tax had been imposed.

These measures are expected to generate over Rs 550 crore this year. The state is in the forefront of the fiscal consolidation exercise with highest social and economic expenditure in the total expenditure, the chief minister said. The non-developmental expenditure is just 28.2 per cent against the national average of 35.2 per cent, he added.

Patel pointed out that while three state PSUs had been closed, work was on for the closure of three more state companies. More than Rs 400 crore has been spent on VRS nad over 17,000 employees have benefited.