What kind of new body is being thought of? 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 utilization of resources, utilization of youth power of the nation, to promote the aspirations of 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 commission a bunch of jokers. But he stopped short of dismantling it. The BJP in its 1998 manifesto said, “The Planning Commission will be reformed and reorganized in light of the changing developmental needs of our country”. The revamp plan during its 13 months rule also explored the possibility. Former Planning Commission Deputy Chairmen like K.C. Pant and even Manmohan Singh made some attempts to explore changes. From a highly centralized planning system, the Indian economy is gradually moving towards indicative planning where the Commission’s role is changing gradually.

The arguments for setting up the new body is that the centralized planning concept cannot work in the changed circumstances, as the Commission is losing its relevance. First of all, 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.

Secondly, many state chief ministers had complained about having to visit Yojna Bhavan and go through the annual ritual of getting approval for their annual plans. Modi too must have resented this exercise as the Gujarat chief minister and 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 setup.

Thirdly the role of Planning Commission after liberalization had nothing to do with keeping the commanding heights of the economy with the public sector. The public sector itself needs reforms.

Fourthly, 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 centralized 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, modernization of technology, liberalization of the economy and improvement in the social indicators over the years.

So what kind of a new body is going to replace the Commission? If one goes by the presentation given by the Planning Commission Secretary Sindhusree Khuller to the chief ministers, the Prime Minister will head the new institution, which should act as a think tank. It may have 8 to 10 regular members with half of them representing the states. The chief ministers would be members by rotation. The remaining could be experts in various fields. The new body could provide internal consultancy services to states and the Centre on different matters. It would monitor, evaluate, programme projects, conduct cross-sectoral and inter ministerial exercise and appraisal of projects. It is not clear how long it will take for the new body to emerge.

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 PMO? What happens to the NDC, which has a special place in the federal setup? Who will formulate and monitor the annual and five year plans or will there be no planning? What about the centrally sponsored schemes? No doubt the Financial Commission will have a bigger role. Who will arbiter the disputes between the states? Will it get a statutory status?

Once answers to these emerge, then the new body could function smoothly. But care must be taken to ensure the independence of the new body. There should be transparency in selection of its members. It should also remain apolitical to get the trust of chief ministers. With the prime minister’s weight behind it , it should be able attract the highest talent in the country. How far the government accepts its recommendations also depends on the prime minister. IN short the new body should be able to function smoothly and effectively without interference from the political class. (IPA Service)