Among the various ideas and schemes which the Prime Minister Narendra Modi announced in his Independence day speech, the most striking was the dismantling of the 64 year old Nehruvian socialist institute called the planning commission and the creation of a new think tank to replace it.
The idea of planning and a planning commission was first mooted by Netaji Subash Chandra Bose and Meghanad Saha in the 1938 Congress session. Post-independence, a more formal model of planning was established and accordingly the planning commission was created on March 23rd, 1950 by Prime Minister Jawaharlal Nehru. It was not a constitutional body but an arm of the union/central government. Post-independence the country faced a lot of issues ranging from huge unemployment, lack of industries, poor education and healthcare system, outdated agricultural methods and low agricultural productivity. To tackle these issues there was a need for proper planning and structuring.
The planning commission has 3 prominent roles. First and foremost is that it draws a blueprint of the country's development over a period of five years and outlines a detailed strategy for achieving this goals and objectives. The first five year plan took off in 1951 and subsequently the second and third plan took off in 1956 and 1961 which laid emphasis on improving the agriculture productivity to make the country self-sufficient in food grains. Successive droughts, the Indo-Pak conflict and the devaluation of rupee halted the five year plans and annual plans were introduced in 1966,1967 and 1968. Annual plans were also introduced in 1990-91 and 1991-92. The first eight plans from 1951-1997 was focused on growing the public sector with massive investments in industry and heavy machinery and developing the agricultural sector. From 1997 the emphasis became less pronounced on public sector and there was a sense that planning should be more indicative.
The second important role of the planning commission is to determine the size of plans for the states and allocate funds. Though it started out as an idea to help states in a planned and efficient manner, it has over the years become a very contentious issue and the state governments particularly ruled by parties who are in the opposition at the centre have accused the commission of being biased.
The third function of the commission is the formulating of various projects and policies of each ministry. While this was brought with an idea of bringing better coordination among various ministries, it has led to the planning commission becoming a parallel unit corresponding to each ministry.
Planning was a vision. It was perceived in 1950s as a tool which was used to usher in faster economic growth. This was consistent with the thinking at that time that the state must have control over many areas, but times have changed. Post liberalisation era has changed the idea of planning and now it is more of an indicative nature. The role of private sector has greatly increased. While the planning of the type that was used for the first five decades is not relevant, we still need an organisation that can tackle contentious and critical issues and provide a long term solution. The role of states has increased. They now have a greater say in the infrastructure and economy. The centre and states need to adopt a broader framework and formulate better policies. The new think tank must facilitate both the states and centre and prepare plans that are acceptable to both.
Two major roles of the planning commission can be reduced. Allocation of funds and resources to the states has always been a contentious issue and should be taken out of the purview of the Commission. The best authority to do this would be the Financial Commission which is a constitutional body. The role the planning commission in deciding on policies of the ministries also needs to be looked at. The issues cutting across various ministries like energy, transport and environment need to be considered and a more holistic view needs to be taken. The ministries consider themselves responsible to implement the projects and often feel the Planning Commission a hindrance. Ministries can be given greater autonomy and in this regard the planning commission should limit its role to more of an advisory body. Moving forward the planning commission or the new think tank needs to take in many new factors like environmental factors and energy security in formulating policies to ensure a faster rate of sustainable growth with equity. The task of planning should now be replaced with growth and development and the other two roles should be delegated to other departments.
Thus in conclusion a National Development Commission or a growth Commission which focusses on sustainable development and is of indicative nature is a welcome replacement of the old Planning Commission which has over the past 60 years greatly contributed to laying the foundations of modern India.