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New Avatar of Planning Commission: Structure and Process IPF and FOF

Author: IPF      Date: 16 Nov 2014 10:30:59

November 15, 2014; Constitution Club of India

Building Institutions for Cooperative Planning in Federal India

A day-long seminar on “New Avatar of Planning Commission: Structure and Process” was jointly organized by the India Policy Foundation (IPF)and Forum of Federations (FOF), an international body of federations at the Constitution Club of India, New Delhi, on November 15. The seminar drew a wide cross-section of the country’s political class, former senior bureaucrats, distinguished academics, economic thinkers, experts and wide participation from the younger generation. This seminar was organized to debate the structure and direction of the new body that is slated to take the place of the erstwhile Planning Commission, which has now been abolished by the Government of India.

Shri A.R. Kohli, former Governor of Mizoram

Shri A.R. Kohli, former Governor of Mizoram commended the IPF and FOF for organizing a seminar on this very contemporary issue. He said that any solutions to any problem must be sought in the fundamentals. Solutions based only on the superficial structure were bound to collapse sooner or later, he said.

Shri Kohli expressed regret that even after 65 years after independence, we have not been able to translate the outstanding democratic and egalitarian ideals that our Constitution enshrines. The huge gulf between the privileged few and the cast masses of have-nots was, most forcibly brought home by the Naxal menace that has many districts of the country in its grip. Shri Kohli said that any process of planning must take care of every India, on which there could be no compromise.

Shri T.S.R. Subramanian , former Cabinet Secretary, Government of India

Shri T.S.R. Subramanian, former Cabinet Secretary, Government of India, said that there is a new generational shift taking place and thanked the IPF for organizing this initiative at this juncture. He called for building new paradigm of thinking as part of the exercise. In this regard, Shri Subramaniam also quoted Montek Singh Ahluwalia, who despite a global free market background, called for a new role for the Planning Commission. He cautioned against such institutions becoming a convenient place of parking for those who eyed governmental postings. Organizations that wield authority but are not accountable are apt to create hurdles, he said, outlining the experience of the past ten years.

Shri Subramanian was critical of the tendency of various departments and ministries of the Government of India to work in silos, thinking of themselves as sovereign entities. This, he said, had worked to keep India behind even some African countries in many important social indices like health, education and industry. An outside perspective was highly imperative for the reform of the administrative machinery, he said. Shri Subramanian bemoaned the lack of linkages between the country’s academic institutions and industry, drawing parallels with the advanced countries.

Dr. Rahul Singh , of the India Policy Foundation

Dr. Rahul Singh of the India Policy Foundation opened the proceedings welcoming the guests, and briefly outlined the importance of a sustained debate on the process of institutional development after the new policy initiatives that have seen the abolishment of the erstwhile Planning Commission, to be replaced by a new body. He touched upon the role of the Forum of Federations (FOF), which has partnered the IPF in this seminar and the debate on the issue.

Prof. Rakesh Sinha, Honorary Director, India Policy Foundation

Prof. Rakesh Sinha, Honorary Director, India Policy Foundation said that the entire process of planning has been a victim of infantile disorder. There have been two streams of thought regarding the planning process one of the socialist members of the Congress and that of industrialists, which found resonance in the form of the Bombay Plan. Unfortunately, there have been sustained efforts to delegitimize legitimate industry and profit. Prof. Rakesh Sinha iterated that no segment of the society can be included from the process of planning. Unfortunately, the process of planning in our country has been captive in the hands of the elite, who, despite their outstanding academic credentials, were rootless and completely alienated from the ethos of the country. They failed to comprehend the unparalleled diversities of our nation and society, its indigenous skills and knowledge base. It is thus the heavily centralized planning bureaucracy spawned by an alien mindset that has played havoc with India’s true federal structure of the ages. Borrowed wisdom from abroad could never truly supplant indigenous system, Prof. Sinha said.

It is important to ensure that as a change is being contemplated, a statist stranglehold should not be supplanted by the domination of private capital, which is never directly accountable to the people or the wider social agenda of a truly egalitarian society, and cautioned against democracy becoming a slave of the market.

Dr. Prakash Chand

Dr. Prakash Chand briefly outlined the exercise both IPF and FOF did in preparation of the seminar, and the wide range of interactions with scholars, experts and all stakeholders on the issue.

Shri Rupak Chattopadhyay, President & CEO, Forum of Federations

Shri Rupak Chattopadhyay, President & CEO, Forum of Federations, briefly outlined the role of the Forum of Federations and India’s unique place in it, as the country is committed to the principles of federalism. He posed a query whether the country really needed a new entity, or whether the existing one would be subsumed into the new scheme of things. In any modern economy, it is important to focus on outcomes rather than inputs. One has to revise the way one does financial planning. States in India have become more empowered over the last 60 years and also have more resources to meet their needs, but there is no institutionalized planning, despite the presences of many bodies. Shri Chattopadhayay also made a point in favour of political engagement, as it is they who have to acquire a mandate from the people.

Prof. Manoj Panda of the Institute of Economic Growth

In the second session, “Reforming Towards an Enabling Institution for Development”, Prof. Manoj Panda of the Institute of Economic Growth said that the Planning Commission, under stalwarts like Prof. P.C. Mahalnobis, did impart some direction to the developmental needs of a newly independent country. India should have had the conviction to change that model, which it failed to do. Over this period, both the planning body and the process of planning have failed not only in keeping up with the growing and changing aspirations of our people, but also un adequately understanding it. A body like the Planning Commission made sense when the commanding heights of the economy were heavily in the public sector, but not in today’s age. Prof. Panda called for the decentralization of economic planning and coordination. In this regard, he called for a national consensus that would transcend the closed circle of economists.

Prof. Ashwini Mahajan of the Swadeshi Jagaran Manch

Prof. Ashwini Mahajan of the Swadeshi Jagaran Manch emphasized the need to construct a new edifice for the process of all-round and holistic development of the country. He traced the changing composition of the country’s GDP and its debilitating after-effects on a basic sector like agriculture and the country’s rural life, which was bound to cast its effect on the rest of the economy. Prof. Mahajan underlined the phenomenon of jobless growth and criticized the tendency to put the onus of sacrifice for the sake of growth only on the poor and marginalized sections. In this regard, he said that the philosophy of integral humanism of the late Pt. Deendayal Upadhyay could be the panacea for socioeconomic problems.

Shri Amitabh Pande, former Secretary

Shri Amitabh Pande, former Secretary of the Inter-State Council of the Government of India was blunt and forthright in voicing his happiness at the demise of the Planning Commission, saying that the Prime Minister’s bold initiative has created the opportunity for fresh thinking. He said that the Planning Commission’s functioning over the years had badly dissipated the federal process, treating states and various segments as mere recipients of munificence of a centralized bureaucracy and not equal stakeholders in the development process. This had also badly vitiated the federal political process and thought, Prof. Pande said. He called for either the creation of wholly new institution or the revamp of existing institutions, preferring the second option as this would allow the potential of existing institutions to be used.

Prof. Dolly Arora, of the Indian Institute of Public Administration

Prof. Dolly Arora of the Indian Institute of Public Administration said that the perspectives on development differ vastly in India, because the people of the country are placed differently in ownership of resources, their capacity to influence outcomes and their needs. This makes the very development concept a contested territory.

Prof. Arora said that in this scenario, there is pressing need for taking a holistic view of development, particularly the inclusion of hitherto marginalized sections. Decentralization is the key to any meaningful outcome in this regard. The Planning Commission has been accused of politicization of the process, she said, while also noting some of its achievements. Prof. Arora said that economic and social planning haven’t converged in India. She stressed the need for holistic approach and systematic analyses, research and plans for integrating planning with the people.

Shri Sameer Saran, Vice President, Observer Research Foundation

Shri Sameer Saran, Vice President, Observer Research Foundation, briefly traced the socioeconomic history following independence and stated that the decisions the country made today, as it seeks to create new institutions would decide the course of its future over the next few decades. He said that largest part of India’s growth and its social indicators would happen outside. India is now linked to the global economy and any process or institution of planning would have to factor in this reality.

In a series of recommendations, Shri Saran predicted that the market economy was going to appropriate many of the roles and functions that were today in the domain of the state, including security. It was therefore, highly necessary to include this emerging reality in all future economic and social planning, he said. He called for the political administration and the polity to devise the mechanisms and mindsets to integrate private enterprise and the markets. He also called for the creation of a truly federal to truly integrate the states. The challenge of integrating an increasingly digitally empowered populace that is still to fully achieve formal education would be enormous.

Noted economic thinker Shri Gopal Agarwal

The third session of the seminar was on “New Institutions for Future Planning and Development”. Noted economic thinker Shri Gopal Agarwal opened the session by moderating the panel discussions. Shri Agarwal’s address also included a forceful plea to include all stakeholders in the process of building new institutions for development and governance. This was imperative for genuine inclusive growth.

Shri B Surendran, Deputy Organizing Secretary

Shri B Surendran, Deputy Organizing Secretary of the Bharatiya Mazdoor Sangh touched upon a very sensitive issue when he said that the attraction for residing in the rural milieu and contributing to it, and respect for rural life has sadly diminished. On the other hand, bureaucracy is used to dealing with developmental issues in mere statistics. Shri Surendran called for a five-tier model in the construction of any new institution. These could ideally be cluster of villages, smaller towns, cities and metros, the provinces and finally the centre at the top. The district should be the coordinating unit of all development plans at the local level. The new body should be an interface between the centre, people and the economy. Two-information flow must be used as inputs, which should be from all stakeholders and segments. The process should not be stifled in any new setup.

Dr. M Govinda Rao, Member of the Finance Commission

Dr. M Govinda Rao, Member of the Finance Commission reiterated the Prime Minister Narendra Modi’s message on the occasion of announcing the doing away of the Planning Commission and the setting up of a new one. He said the centralized command establishment was far too confident of its ability to administer development while treating the country’s private sector with needless disdain, whereas the results have only underlined centralized planning’s utter inability to carry out its stated mandate.

Dr. Rao said that the vibrant private sector in the country was a reality, particularly after the liberalization of 1991. He said that states are becoming increasingly competitive. This has spawned a new phenomenon of competitive federalism. The issue of coordination between the centre of the states also assumed a challenging dimension if different political parties were in power at the centre and the states. This led to increased coordination costs. Any new institution would have to create a mechanism for coordination and must embrace s strategic vision. Dr. Rao called for a merger of the Inter-State Council with the Finance Commission.

Dr. Narendra Jadhav, former Member of the Planning Commission said the body had become a whipping horse but had not done as badly as was being made. He said the proposed new entity must completely eschew the traditional command and control mould. It must convince the states and the centre to try new things. It must not function as yet another ministry. It must be a genuine knowledge hub bringing in expertise to handle complex issues and developments.

Dr. Jadhav was in favour of the old hierarchical structure being retained, with the Prime Minister being charge. The new entity must focus on long-term projections and trends, in consonance with developments taking place in the global economy. Agriculture, industry, skills development, infrastructure and centre-state relations and broader vision would have to be part of the new entity’s working. Domain specialists and experts would have to be recruited by the proposed new entity. The new entity must also be able to effectively deploy such expertise. There should be Standing Sub-Committee of the new entity for each area, to be chaired by the CEO of the new avatar. Dr. Jadhav also stressed the need for international experts. He argued for a more effective role for the National Development Council. Plan documents, he said, must become leaner and incorporate long-term vision.

Shri Pradeep Singh Mehta, Secretary General, CUTS International said that Prime Minister Narendra Modi’s decision to scrap the Planning Commission and set up a new body is akin to what is called “creative destruction”. He was of the opinion that the Planning Commission did do some good work, which should not be overlooked. He said that the dire necessity of a new body is resonant with the wide opinion in the country with regard to this issue.

Shri Mehta quoted the Chinese example, where the central planning commission was replaced with new commissions. He wanted the new avatar to be a quasi-federal one, not federal, as India is a unitary state and constitutionally not a federal one. The new proposed body by incorporating the best of governance practices of a variety of institutions both in India and overseas, could play a variety of roles, he said.

Shri Harsh Singh, former Assistant Resident Representative, UNDP – India,

Shri Harsh Singh, former Assistant Resident Representative, UNDP – India, said that India has reached a stage where its potentialities and the needs of its people have grown so large that they cannot be met by the process of planning alone. There are large sections of the country’s people who are devoid of any asset. This leads to their increased impoverishment as the economy develops. The biggest asset people could be given is the creation of a new cluster of urban centres close to rural areas. Shri Harsh Singh mooted the concept of Navoday Shahr (New-Rise Towns) in this regard.

Planned schemes or a centrally planned process could not achieve all of this, said Shri Singh, calling for the new avatar to be at the forefront of a truly transformational process. He said there was growing disenchantment with the political class. This class could win back its legitimacy by embracing this transformational process, which was possible because of the advent of a strong political leadership. The proposed new body should be the fountainhead of this process, according to Shri Harsh Singh.