New Delhi: Planning Commission on December 21 warned of a "social unrest" in the country in case the alarming rise in unemployment is not tackled by favouring labour intensive sectors for attaining 8 per cent economic growth during the 10th Plan period.

Emphasising on balanced regional development in tandem with national growth target, K C Pant, deputy chairman of Planning Commission said, "The most pressing issue facing us today is the rapid growth in the labour force that we are likely to experience over the next decade."

Addressing the National Development Council (NDC) meeting under the chairmanship of Prime Minister Atal Behari Vajpayee for approving the 10th Plan, Pant said attainment of eight per cent growth target would call for "strong and co-ordinated effort by all Central Ministries and by every state".

He listed out three areas of concern – fiscal correction, power sector reforms and removal of inter-state trade barriers – for the collective focus of the states and said Centre should monitor reforms and programme implementation in states and come up with a time-bound action plan.

"The Ministries (Central) will have to institutionalise a consultation process with the states so that both implementation and monitoring of plan programme can be carried out in a spirit of co-operation," Pant said.

Besides doubling per capita income in 10 years, the 10th Plan seeks reduction in poverty ratio by five-percentage point by 2007 to reach 21 per cent.

Commenting on the rising interest payments forming a large part of non-Plan revenue expenditure, Pant said, "Our projections indicate that the interest payments to gross domestic ratio (GDP) ratio will show a declining trend even if the interest rates harden a little from their current levels."

This trend was of course conditional on the fiscal deficits of the Centre and the states being maintained at the level indicated.

He also said that there was a need to raise tax collections in view of indications that the non-tax revenue to GDP ratio of both the Centre and the states was likely to decline during the 10th Plan period.

On rise in unemployment in the country, Pant emphasised that the target growth rate of eight per cent annually was essential to generate substantial employment opportunities while pointing out that it would not be enough.

Projections show that during the 10th Plan period, the labour force will increase by 35 million, whereas the growth process by itself will generate 30 million job opportunities, leaving a gap of five million over and above the backlog.

"Therefore, special focus will have to be placed on a few critical sectors, which have high employment potential. By doing so, we should be able to generate 50 million work opportunities, which will not only take care of the additions to the labour force, but also significantly reduce the backlog of unemployment," Pant said.

PTI