India attained freedom after a prolonged struggle. British authority had completely dwindled India's valuable resources. India which was once considered a 'Golden Bird' was now having only meagre resources at its disposal. In such a situation it became imperative to judiciously utilize whatever available resources we had. With this intention Planning Commission of India was constituted by an executive resolution in 1950 by the government. It was a dream project of Jawaharlal Nehru who was predominantly a socialist and was very much influenced by the success of Soviet Union and more specifically their concept of long term planning. He wanted to channelize the resources of the country in an organized manner and wanted to transform India into an industrialized country.
Planning commission is entrusted with the responsibility of making an assessment of the material, capital and human resource of the country; to formulate a plan for the effective utilization of country's resources and also to indicate the factors that retard economic growth. In other words, Planning Commission's task is to determine the future course of action; how policy will be implemented and to lay down well designed guidelines keeping in mind country's resources.
The recent announcement by the newly elected government has invited a volume of debates in the public domain. Some see it as a politically motivated move to completely abolish the hegemony that one dominant party has exercised over six decades, whereas some consider it as a rational step without any element of political prejudice. But to me, more important question is that, what kind of institution would replace Planning Commission. What would be its structure? How it would be different ideologically as well as practically from Planning Commission? Or will it be just an old wine in new bottle?
First of all, let us discuss that what triggered the government to take such action, that is, what is the need of a new institution. This can be answered in light of the criticism that Planning Commission has attracted over the last six decades.
One of the most common ground of criticism is its composition. Its composition itself raises questions on its efficiency and it also indicates to a large extent why it has gained such dominance. The Prime Minister acts as the Chairman of the Commission, a Deputy-Chairman (selected by PM), 5-7 permanent members and a few part time members. It is imperative to note here that there is no representation for States in the commission in any form. This indicates how a handful of people take the most crucial decision related to our country and their decision also sometimes reflect the political ideology of the Party ruling at the centre.
Planning Commission has been criticised on several ground by various academicians. Rajni Kothari while criticising Planning Commission has said that, it has reduced the operational autonomy of states which consequently has changed the shape of Indian federalism at the cost of state autonomy. Planning Commission was expected to come out with scientific approach to make plan but the databases it uses are more unscientific than scientific.
Dr. Deepak Nayar has criticised Planning Commission for its departure from its original designated functions and the role which it was intended to play. According to him, after the third five year plan, Planning Commission largely remained occupied with crisis management than focussing on long term planning.
To add to all this, Planning Commission while working on the draft paper of 11th Five Year Plan itself acknowledged that whatever India has achieved till date has come at the cost of exclusion of a large section of society. Hence, the 11th and the 12th Five year plans incorporated the word 'Inclusive' in the title of the plan. But unfortunately 11th plan also met the same fate. It is a grave irony that an institute which talks about inclusion has place for state representation.
After having discussed the criticism, we must shift our focus to a question of greater substance. The Prime Minister in its Independence Day speech said that, the new body will lead the country based on creative thinking, PPP, optimal utilization of resources, utilization of youth power and promote the aspirations of the state governments to empower the federal structure. Creating such institution which will live up to all above mentioned objectives would require herculean efforts.
There is serious need of a new institution that can make a clean break with the past, but the real question confronting the government is what should be the structure of this new body. I feel that any new body that replaces planning commission must have an independent think tank which supports high quality research for the purpose of policy making. This think tank must have skilled experts with farsighted vision and deeper insights than people who look at problems only from an objective angle. We must not forget that economic problems do not always have economic solutions. Problems faced by economies mostly have their genesis deeply rooted in the socio-political setup of the country. Therefore, we need an institution that can tackle proms in a comprehensive way.
More importantly, the new body will have to take a departure from the 'one size fit all' approach adopted by Planning Commission. At last but not the least, the structure of governance of the upcoming institution should be able to maintain highest standard of credibility, transparency and independence.