The scrapping of the Planning Commission had made recent news after its announcement by Prime Minister Modi in the Independence Day Speech this August 15. There has been considerable amount of debate whether or not this was a sound decision. Let us look into the issue to get a deeper understanding.
The Planning Commission has been responsible for the five-year-plans since its inception in 1950. The Commission is independent and reports directly to the Prime Minister. The major goal of the initial five-year-plans was to make India self-sufficient. They concentrated on the agricultural sector. As and when the need was fulfilled, other sectors such as industry and the service sector were given importance. Over the past fifty years, the Planning Commission has done its share of work which led the country on the path for development and progress. It has chalked out and laid the foundation for growth by identifying, assessing and promoting the key sectors which improved the country's economy. That being said, the growth has been slow and the measures taken have not seen fruition to the expected effect, to put it mildly.
The Five-year-plans were meant to alleviate the standard of living in the nation but still a large population is suffering from poverty, is unemployed, and is not benefitting from the schemes the government creates for them. Somewhere along the formulation of these plans, the set targets had become too ambitious instead of pragmatic. The actual growth has always been less than the target growth, which means either the planning or the execution is not done properly. Given the sporadic instabilities of the incumbent governments in the past years, the exponential growth of the country's population and its diversity, corruption among officials among other reasons, the plans have not been implemented in the right manner. This lead to suffocation of the economy rather than its intended uplift. It shows that these plans have not been working as planned. That means, either they need to be revised or a complete new way of planning needs to be introduced.
The Independent Evaluation Office recommended the scrapping of the Planning Commission. It suggests federalism might prove to be more effective instead of the highly centralized nature of the Planning Commission. The States know better what they need and each state would differ in what it needs and if decentralized properly within reasonable limits, they will benefit immensely. It is only when the individual parts function properly that the country as a whole can function well. The Prime Minister takes the federal side and hopes to form a commission which is more dynamic and has keen insights pondered by a group of specialized members who are experts in their respective fields.
The idea of federalism appeals to India now more than ever given its state of evolution. Yes, scrapping the Planning Commission may at the first glance seem unsound. But reasoning it proves that such an action is necessary if we need radical and rapid improvement.