K.Mohan chief economist stressed the need for sustainable development for alleviating poverty and generating employment. India need high rate of sustained growth to alleviating poverty, increase living standards and reduce differentiation to achieve this we need to look at overall growth with an eye on long term sustainability. He said, while focusing on sector which were employment intensive itwas necessary that it was equally important to lay stress on forward and backward linkages which were employment intensive


For development of the rural areas, he said the focus would be on farm productivity through strengthing of allied services, improving and expanding innovation networks and promoting market led crop demarcation The noted economist k.mohan has said that with neo liberal policies gaining ascendancy, Finance Commission Award are taking the nation towards economic Ballkanisation and to improve neo liberal economic policies of state govt. By making devolution of funds to states and their accepting the structural adjustment agenda the central govt was forcing them to improve their fiscal deficit and to improve the welfare of the masses and financial authority of the state govt. There is a fundamental difference between the Finance Commission of the Nehruvaian tones and that in the era of globalization. The Financial Commission was originally conceived as an arbiter for shaiting of financial resources between the states but in the present era of neoliberal economic policies it is being used by central govt as an instrument of coercion. Earlier the state was conceived as a champion of the nation as a whole but in the age of globalization the state has become a defender of international finance capital as against the interests of the poor. Mr.k.mohan said three main characteristics of neo liberal economic policies are reduction in the tax to GOP ratio reduction & increase in interest payments by the state. One computation had shown that of ht tax to GDP ratio was retained at the 1999 level, the central govt would have had Rs 30,000 crores in additional resources of the interest payments which could have been kept low. But by pursuing neoliberal policies the govt had brought methods such as disinvestment of its equities in public sector units and rolling back govt expenditure.

He said that by the end of the 1990s the centre began passing the burden of the crisis to the states by means of making transfer of funds conditional on acceptance and implementation of neo liberal economic policies and charging high interest rates from the states for funds tranferred as loans and assistance. When the states were reduced to penury they began to press the finance commission to set methods right. But what the 11th & 12th Finance Commissions had done was to insert on acceptance of condition lists for release of funds to them. The states are also new being asked to borrow funds directly from agencies. The states could do so only by pledging resources to global monopolies, trifurcation of the state electricity bodies,he added.