Arguments for setting up a new body is that centralised planning concept cannot work, as the plan panel is losing relevance
The Modi Government’s decision to do away with the six-decade old Planning Commission is an important exercise in a federal set-up, meeting the assertions of the Chief Ministers. Mr Narendra Modi had announced this from the ramparts of Red Fort during his first Independence Day speech. This week, the same has been taken forward with a meeting of the Chief Ministers to discuss and decide about the shape of the new body.
As expected, politics has crept into this important issue and the efforts to sort out the differences in the retreat informally did not work. While the NDA Chief Ministers endorsed Mr Modi’s view, the UPA Chief Ministers, mostly from the Congress-ruled States, opposed the idea that it was being done with a view to get rid of a Nehruvian legacy.
What kind of a new body is being thought ofIJ Mr Modi has given an indication. “We will replace the Planning Commission with a new institution having a new design and structure, a new body, a new soul, a new thinking, a new direction, a new faith towards forging a new direction to lead the country, based on creative thinking, public-private partnership, optimum utilisation of resources, utilisation of youth power of the nation, to promote the aspirations of the State Governments seeking development, to empower the State Governments and to empower the federal structure.” It is a huge task indeed.
This is not the first time the Government is dismissive of the commission. Rajiv Gandhi called members of the commission a “bunch of jokers, but stopped short of dismantling it. The BJP in its 1998 manifesto said, “The Planning Commission will be reformed and re-organised in light of the changing developmental needs of our country.”
The revamp plan during its 13-month rule also explored the possibility. Former Planning Commission Deputy Chairmen like KC Pant and even Manmohan Singh made some attempts to explore changes. From a highly centralised planning system, the Indian economy is gradually moving towards indicative planning where the commission’s role is changing gradually.
The arguments for setting up ta new body is that the centralised planning concept cannot work in the changed circumstances, as the commission is losing its relevance. First, times have changed and issues have changed and Nehru himself would have been the first to say that the commission needs a re-look had he been alive. In a market economy, the planning process needs a different orientation and outlook.
Second, many State Chief Ministers had complained about having to visit Yojana Bhavan and go through the annual ritual of getting approval for their annual plans. Mr Modi too must have resented this exercise as the Chief Minister of Gujarat and would have made a mental note of it to rectify when he became the Prime Minister. In the changed scenario, the States want more say in a federal set-up.
Third, the role of Planning Commission after liberalisation had nothing to do with keeping the commanding heights of the economy with the public sector. The public sector itself needs reforms.
Fourth, Mr Modi’s critics say that he wants to dump Nehru’s legacy and doing away with the Planning Commission is one of them. When the commission came into being in February 1950, it was an era of centralised planning for the country. It assessed the assets of the country and formulated plans for their use.
It reviewed and discussed social and economic policies that affect national development. It also allocated funds for the centrally sponsored schemes. It has claimed credit for the increased agricultural and industrial production, modernisation of technology, liberalisation of the economy and improvement in the social indicators over the years.
Now that a decision has been taken, there are several questions, which need clarity. The Chief Ministers’ meeting this week has not found an answer as to who would allocate funds and transfer from the Centre to the States. Will it be attached to the Finance Ministry or the Prime Minister’s OfficeIJ
What happens to the National Development Council, which has a special place in the federal setupIJ Who will formulate and monitor the plans, or will there be no planningIJ What about the centrally-sponsored schemesIJ No doubt, the Finance Commission will have a bigger role. Who will arbiter the disputes between the StatesIJ Will the new body get a statutory statusIJ