NEW DELHI, India, Dec, 22, Reuter: A bold plan to reduce poverty in India by 1990 has run into serious problems at the halfway mark because of soaring prices and a booming population.

Prime Minister Rajiv Gandhi, unveiling the seventh five-year €00nomic plan three years ago, promised to alleviate the hunger and poverty that grips nearly half of India’s 800 million people.

‘The plan got off to a good start, hitting targets in the first two years, but is sputtering in the third year because of drought, India’s worst this century.

Economists say the drought will push more people over the poverty line — a sensitive issue in the World’s second most populous country ~ while rising inflation and drought relief will gnaw deeply at state financial resources,

Millions in rural India exist below poverty levels drawn by the United Nations. In major cities such as Calcutta and Bombay large sectors of the population live and die on pavements or in make ‘shift huts.

The ranks of the urban unemployed, which Gandhi promised to, reduce when he swept to power after his mother’s death, have swelled from 22 million three years to more than 600 million.

Analysts say economic growth ‘will fall well below the five-percent annual average envisaged by the plan.

“It is clear that the seventh plan target of overall (Gross National Product) growth of five per cent will not be attained,” said Malcolm Adiseshiah of the Madras Institute of Development studies.

Other forecasts, including. the World Bank’s, paint a grimmer picture, saying growth will halt altogether this year and that the effects of the drought will be felt over the next two years as well.

The drought is forecast to slash this year’s rice production target of60 million tonnes by a quarter.

‘The population has been spared starvation so far because of a food grain buffer which dwindled to 17 million tonnes by October from 23 million in July.

The drought also devastated oilseed and cotton crops and sharply pushed up prices of essential com modifies.

Economists say Gandhi faces the crucial task of stemming inflation, officially about seven per ‘cent but estimated by analysts as having already hit double-digit levels.

Article extracted from this publication >>  December 25, 1987