On the eve of independence, economic and social condition of the country was in bad shape because of biased English economic policies. The involvement of state in economic policy formulation was inevitable for new-born country like India as social and economic disparity was very high and the private business hands were not very strong and were themselves in need of help. The middle period of the 20th century was dominated by communist views across the world and this led to establishment of the planning commission, a soviet model organisation in 1950 under article 39.
The prime duties of planning commission are assessment of resources, economic and social policy formulation, finding parameters of hindrance in country's economic development and many more. Finance commission of India distributes the federal tax among states and central government. Planning commission allocates the funds to state as per requirement. The planning commission has played very pivotal role in establishment of PSUs and other heavy industries, so that it can provide basic infrastructure to other industries. Planning commission has played crucial role in developing agriculture sector and small scale industries. Planning commission also monitors pan India social security schemes like MNREGA and ICDS.
India being second highest populated country and having huge geographical, regional and cultural diversity has its own economic issues. Also the start of era of globalisation has changed the world. Now economics of the country requires creativity and innovation. Planning commission was set to form a group of think tanks from every field but now it has become more of bureaucratic in nature. Bureaucracy is like fungus that contaminates everything. From last few decades implementation of five year plans have been not achieved neither timely nor cost wise properly. Nowadays Planning commission has been often criticized by economists for being involved in politics and red tapism. India has got 29 states and 7 union territories and all of them have their own issues related to development. States are required to be more autonomous in terms of taking initiatives towards their economic planning considering their local factors. Indian economy is passing through a difficult path. Our current account deficit has increased a lot and GDP is low.
Recent central government decision of scrapping the Planning commission and constituting a new institution consisting of think tanks from different fields may appear as a good step, but nothing new. The concerns with Planning commission are abatement in innovative and creative thought process, corruption in implementation of economic and social schemes, increasing impact of bureaucracy and many more. All these issues can appear again with new institution as well as these are operational and monitoring issues. The demand for hour is strong, efficient and inclusive planning about resources. The current style of planning in India needs to be changed. The central government should revamp the planning commission and should check every parameter of its functions instead of constituting a new organisation. Government should ensure that all members of planning commission should be prudent, audacious and expert in their respective fields. Government has to keep an eye on hindrances from the polity for making populist policies. The thinkers should be given free hand to come up with new ideas and innovation. Government should prepare checklist for implementation of social and security scheme at grass root level. Development can be achieved by good planning and by its complete and honest implementation.