The planning Commission has a distinguished past. Many eminent men and women have adorned the position of Deputy Chairman and member. The Planning Commission was established in March 1950 keeping in view the necessity for a planned economy for the betterment of the masses. It now performs three functions. First and the foremost, it draws a blueprint for the country's economic development over a five year period. After approval of the Five Year Plan, the PC in consultation with the Finance Ministry also determines the annual plan. Second, flowing from its function of determining the size of plans for states, it also allocates funds for states. Third, the Planning Commission has a key role in the formulation of various policies and programmes. It critically assesses the various individual programmes of Ministries.
The planning was perceived in 1950s as the most appropriate tool for ushering in faster economic growth. But the time has changed. In the post-liberation period the concept of planning has itself undergone a change. But in the contemporary scenario, a question has arised on its very existence and its utility. Let us examine the situation.
The state might play a diminishing role; it still plays a critical role in the economy. In the infrastructure sector, it still has a dominant role. The Centre and the States agree on some broad discussion, it would facilitate the adoption of better policies. Such an organisation would be much more than a think tank. It should prepare a road map that would be acceptable to both the Centre and the States. As far as policy formulation is concerned, it should take holistic view and offer advice.
The second function of allocating funds to the States is somewhat debatable. Critics have it that this function should be performed by the Finance Commission. The quantum of transfer of funds through this mechanism has been diminishing. The flow of funds from the Centre continues through the Centrally Sponsored Schemes (CSS). Given the State's aversion; it may be best that this function is fully entrusted with Finance Commission.
The third function of evaluating projects and giving approvals has also raised many controversies. The Ministries regard the implementation of policies as their prime responsibility and they very often considers Planning Commission a hindrance. But at the second look, leaving this task entirely to the Ministry seems appropriate. The Planning Commission has been looking to restructure itself. It could have enhance federal element if, besides Central Ministers, the Chief Minister were also included as members. They would have given it a National Character.
Change is inevitable and the policies, programmes, structure and functioning of organisations should be changed as per the contemporary needs and requirements. As in the case of Planning Commission, there is scope for amendment for some extent but its complete abolition also becomes debatable. The Centre and State governments should work in coordination with each other considering the Planning Commission as necessary for progress