New Delhi: The National Development Council (NDC) will meet in New Delhi on December 21 to finalise the 10th Five Year Plan envisaging an eight per cent growth target amid sharp differences between Centre and the states on the issue of waiving state's outstanding debt to improve their flagging resource position.

Though several meetings between the Centre and states on this issue have proved inconclusive, states are expected to ask the Centre to either waive the debt or enhance the grant component under the Gadgil-Mukherjee formula as a prerequisite to achieve the ambitious eight per cent growth target.

Planning Commission officials are understood to have held several meetings with Finance Ministry officials to sort out the issue even as the Centre is aware that acceding to states' demand in totality could affect its own resource position in terms of gross budgetary support (GBS) for the plan.

This could be one of the reasons why Finance Ministry has not yet communicated to the Planning Commission the GBS for the next annual plan, even though the Commission had sought a response by December 12.

The 10th Plan draft document points to severe financial pressures faced by states and says "the fiscal sustainability of states and union territories is considerably more vulnerable than for the Centre and requires greater fiscal correction."

Deputy chairman Planning Commission K C Pant has also admitted to the increasing importance of states in planning when he said on December 19, "There is now a growing relevance of a state level perspective in national planning."

PTI