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Waiting for a plan

While delivering his maiden Independence Day speech from the ramparts of Red Fort, Modi said that time has changed and that the Planning Commission which was relevant once, is of no use today.

Modi said that it is high time we replace the 64-year-old apex policy making body, whose five year plans are always laboriously crafted but rarely followed, with a new institution to address the emerging economic needs and to strengthen the federal structure. During his speech, Modi said, ‘We will very soon set up a new institution in place of Planning Commission... the internal situation of the country has changed, global environment has changed... If we want to take India forward, then states will have to be taken forward.’

Planning Commission, a Nehruvian legacy, was created in 1950 on the Soviet model to free infant India from the clutches of abysmal poverty through five-year planning system. Clamour was growing strong against its existence ever since its powers started to wane following the opening of the economy in the 1990s.

‘Since the Planning Commission has defied attempts to reform it to bring it in line with the needs of a modern economy and the trend of empowering the states, it is proposed that the Planning Commission be abolished,’ the Independent Evaluation Office (IEO) had said in a report, headed by
Ajay Chhibber.

As per the report, a new think-tank body is suggested to replace Planning Commission with prime minister at helm again, comprising experts as well as representatives from corporate and key states with domain knowledge. Chhibber said the panel should be transformed into a body of experts which functions as a repository of knowledge and new research, offering long-term solutions for problems like climate change and coastal management.

‘The idea for the think-tank is not very clear. But, in-principle, I welcome this bold initiative by the government. Planning Commission has failed to keep with the sweeping changes within Indian as well as global economy. But we must remember that prime minister Modi praised the work done by Planning Commission,’ says former commission member Narendra Jadhav.

‘There are so many unanswered questions. Firstly, what would be the size of the body and would they continue with five-year plan? Secondly, if it is going to be a think-tank, then what will happen to Prime Minister Economic Advisory Council (PMEAC), Public Information Infrastructure and Innovations (PIII) and other arms of Planning Commission, which are already working as think-tank bodies? Will they be subsumed under the new proposed body? We also have planning bodies at the state and district level. What will happen to them? All these things remain to be seen and I think government is grappling with all these issues currently. So it is premature to comment on this subject,’ Jadhav added.

Planning Commission deputy chairman for 10 years Montek Singh Ahluwalia refuses to comment over the issue. While talking to Millennium Post Ahluwalia said, ‘My comment on this issue is that I will not comment on it.’

In its lifetime of 64 years, Planning Commission has not remained insulated from controversies. While time and again it has been lambasted for being biased when it comes to allocating funds to states, one cannot forget the ‘stinking’ expenditure of Rs 35 lakh on renovating two toilets in Yojna Bhawan in 2012. And above all the suggestion of Planning Commission that citizens who consumed goods worth Rs 27 or more were not poor remains the most ludicrous incident.

IEO report recommended more power be given to the states governments as they have better information about local requirements and resources than the central government and central institutions, hence, they should be allowed to identify priorities and implement reforms at the state level, independent of mandatory diktats from central institutions.

Therefore, the proposed new body is likely to remove contention between states and commission over allocation of funds entailing faster decision-making. But if the power goes to Finance Ministry, then problem appears to persist.

Welcoming government’s move, Planning Commission ex-member Arun Maira said, ‘Dr Rangarajan Panel in 2011 had already suggested abolition of system classifying government expenditure into Plan and Non-Plan and advocated for allocation power be given to Finance Ministry. With the proposed think-tank body, this problem of conflict between states and centre might stay.’

To this point, Jadhav added, ‘We can have two alternative points on this. First, if allocation power goes to Finance Ministry, this would result in centralisation of power, but that would be consistent with the principle of democracy as elected members would be responsible for funds allocation. Otherwise, if fund allocating power is retained it will reinforce decentralisation.’

Planning Commission former secretary NC Saxena said that if allocation power is retained with the new proposed body, then it will be a case of presenting old wine in new bottle.

‘The important issue arising here is that government has not given any clarity on what will happen to Rs 3 lakh crore which the panel disburses every year,’ noted Saxena.

Some expert says the new commission will be on the lines of China’s National Development and Reforms Commission. The proposed multi-member body is expected to be very contemporary in its thought and being. Also it is proposed that the commission will be replaced with a five-member think-tank.

There are many aspects that remain open to guesswork. Till the time Modi government gives further insight into this attempted structural overhaul, speculations and suggestions galore.

On the question of what would be the structural changes in the new body, Janata Dal (United) president Sharad Yadav, said, ‘The BJP govt under the leadership of Narendra Modi is doing nothing. They are just creating a wave of development. But in reality no new thing is happening.’

While taking on Modi government for scrapping the plan panel, Yadav said, ‘Modiji bas idhar ka maal udhar kar rahe hais. Isse kuch fark nahi padega. (Modi is just replacing the stuff from one place to another, which will not make any impact)’.

The voice of protest over the axing of Nehruvian-era commission from Congress leaders is an obvious argument. Opposing the Centre’s move, senior Congress leader Manas Bhuniya accused prime minister Narendra Modi of trying to eradicate all achievements of the Congress rule.

‘Going by BJP president Amit Shah’s comment a few days ago that BJP needs to work to make India Congress-free, the prime minister seems to be working in that direction — wiping out all the good work of the Congress regime, including abolishing the Planning commission,’ Bhuniya said. Rather than abolishing the commission, Bhuniya suggested, the centre could take up new policies to change its functioning and structure.

Planning Commission: A brief history

The Planning Commission was set up in March 1950 by first PM Jawaharlal Nehru to optimise scarce resource in the nation. But, over the past few years, it has earned the dubious distinction of being a parking lot for cronies of the erstwhile UPA government. The Planning Commission has been plagued by red-tapism and other controversies which have affected its functioning. A move towards empowering states during his tenure as chief minister of Gujarat, Modi had accused the commission of giving step-motherly treatment to BJP-ruled states, especially Gujarat. He had said the state has never been given adequate funds to carry out development work. He also accused the members of commission of high-handedness and hobbling states with one-size-fits-all policies.

In the process of scrapping the plan panel, questions that may prove to be worrisome for Modi government are: What will happen to the special status promise to Andhra Pradesh and Telangana, which was approved by the cabinet during the last lap of ousted UPA government, special package to Bihar, etc. The hope is that Modi has all the answers or might be burning midnight oil to find out the solutions of ‘problems in the offing’. Modi has invited ideas about the shape of new body from experts. Modi tweeted, ‘Inviting you to share your ideas on what shape the new institution to replace the Planning Commission can take.’ The nation is waiting to see what form these ideas take.

The Planning Commission was set up by a resolution of the government of India on 15 March, 1950, with prime minister Jawaharlal Nehru as the chairman. The plan panel was established in pursuance of declared objectives of the government to promote a rapid rise in the standard of living of the people by efficient exploitation of the country’s resources, increasing production and offering opportunities to all for employment in the service of the community. The Planning Commission was charged with the responsibility of making assessment of all resources of the country, augmenting deficient resources, formulating plans for the most effective and balanced utilisation of resources and determining priorities. Jawaharlal Nehru was the first chairman of the Planning Commission. The Planning Commission does not derive its creation from either the Constitution or statute, but is an arm of the central government.

The first Five-year Plan was launched in 1951 and two subsequent five-year plans were formulated till 1965, when there was a break because of the Indo-Pakistan conflict. Two successive years of drought, devaluation of the currency, a general rise in prices and erosion of resources disrupted the planning process and after three Annual Plans between 1966 and 1969, the fourth Five-year Plan was started in 1969

The Eighth Plan could not take off in 1990 due to the fast changing political situation at the centre and the years 1990-91 and 1991-92 were treated as Annual Plans.

The Eighth Plan was finally launched in 1992 after the initiation of structural adjustment policies
For the first Eight Plans the emphasis was on a growing public sector with massive investments in basic and heavy industries, but since the launch of the Ninth Plan in 1997, the emphasis on the public sector has become less pronounced and the present thinking on planning in the country, in general, is that it should increasingly be of an indicative nature
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