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Planning Commission: WOUND UP OR TRANSFORMED?, By Dhurjati Mukherjee, 9 July, 2014 Print E-mail

Party Forum

New Delhi, 9 July 2014      

Planning Commission

WOUND UP OR TRANSFORMED?

By Dhurjati Mukherjee

 

Does India need a Planning Commission? Does it serve any utility? None, if most experts are to be believed. According to them this large body has little value in today’s state of affairs. Towards that end, the erstwhile UPA regime had set up an Independent Evaluation Office (IEO) for evaluating Government schemes and programmes, including assessing the role and effectiveness of the Planning Commission in November 2010.

 

Notably, in its recent report to Prime Minister Modi, the IEO underscored that the Planning Commission in its present form is “a hindrance not a help to India’s development”. Adding, it is impossible to reform such a large ossified body, instead, the report suggested replacing the Commission with a new body needed “to assist States to provide long-term thinking and help in (carrying out) reforms.”

 

Further, the IEO report observed: “Since the Planning Commission has defied attempts to reform and be in line with the requirements of a modern economy and the need to empower States, it proposed the Commission be replaced”.

 

Obviously, replacing and/or transforming the mammoth Commission has to be carried out in a phased manner so that it becomes an effective instrument in providing necessary support and guidance to States.

 

Pertinently, even as the Planning Commission has been bringing out voluminous documents, approach papers, Five Year Plans and mid-term reviews etc most of these documents had very little practical value and did not help States in any manner. In fact, over the last few decades the reports/documents not only elicited merely academic interest but also could have been brought out by any University and/or academic institution, if assigned the task.       

 

Remember, in early 2008, a well known public finance expert Amaresh Bagchi pointed out that the Planning Commission helped in diving taxing revenue in such a way that the Centre was much richer than the States.

 

True, whether this was a ploy to exert control over the States through financial power is not known but possibly this was one of the key directives to the Commission.

 

Besides, when the Centre instituted the Five-Year Plans, it also decided to control expenditure related to these Plans. However not a few experts felt the Commission was used to enslave States financially without bothering to understand their problems and offering solutions.

Undoubtedly, the Planning Commission has not helped in any way in checking and/or curbing the fiscal problems of States, some of which are in dire distress. In the first decade of the present Century, some of the States were so bankrupt that they had to borrow even to meet their revenue expenditure.

 

Even after these problems accentuated, the Commission did not offer any concrete solutions to the States. In effect, it expected States Chief Ministers to come with a begging bowl to finalize their annual plans every year.

 

Also, it has been pointed out that such an exercise is meaningless and should be discontinued. In its place, a rational and judicious methodology should be evolved in finalizing the annual plans whereby the States performance, efficiency and monitoring aspects should primarily be considered. This could be done by any agency; consequently such a huge Planning Commission is not required.

 

Arguably, if this work ceases, what use would the Commission have? Think. Even Five-Year Plans have been an anachronism. As it stands, it is impossible to predict the course of the economy five years ahead notwithstanding a future outlook Plan of action is needed.

 

It is also not possible to forecast the outcome of projects as there have been several instances whereby not even 50-60 per cent work has been accomplished in the Five Year Plan period. It needs to be mentioned here that Britain’s Treasury issues a rolling five year macro-economic forecast together with its annual budget.

 

There is no gainsaying, it is politically impossible to close down the Planning Commission at this juncture in spite of the recent IEO report. All said and done, there is also very little logic in winding up the Body totally as some of the work done needs to be continued.

 

For example, the project evaluation division needs to be strengthened to assess the work being completed all over the country along-with giving guidelines, including technical consultancy for improvement, if necessary.

 

Significantly, the Comptroller and Auditor General too does the same thing with admirable efficiency but his scrutiny is only financial. In assessing projects, it could also help the States by finding technical consultants --- both Indian and foreign --- and also arrange finance.      

 

Undeniably, the Commission should be replaced with a small outfit to formulate future action plans in consultation with States, along-with their financial requirement say over a period of three to five years. Additionally, the alleviation of poverty should be given due cognizance and the problems being faced in this regard by the states should be duly considered.  

 

In future, the Commission should be more careful – and academically equipped -- in making estimates like it did when, in an affidavit submitted with the Supreme Court, it observed that households with per capita consumption of more than Rs 32 a day in urban areas and Rs 26 a day in rural areas would not be treated as poor. 

 

Furthermore, a major activity of the Commission is to constantly inter-act with States regarding their financial problems as also future projects to be undertaken. Starting from assessing the viability of these projects to arranging consultants and investment and eventually helping States in monitoring these, could emerge as the Planning body’s most important activity in the coming years.   

 

There can be no denying that a transformed Commission has to be in place and the earlier this is done, the better. Before taking any decision, it needs to be seriously thought out. An expert body from different disciplines should be given the task to clearly outline the various functions of the Commission, including the new responsibilities it has to shoulder. 

 

In the ultimate, it is expected that the Modi Government would not take much time to give due attention to reforming the Planning Commission and shouldering it with added responsibilities. ----- INFA

 

(Copyright, India News and Feature Alliance)

 

 

 

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