By scrapping the Planning Commission, Prime Minister Narendra Modi ended all the speculation over its fate , which was largely seen as the ‘parking ground’ for retired civil servants and individuals close to the powers that be.
Modi, in his maiden Independence Day speech, announced that the Commission will be replaced by a new institution, having a new thinking and direction, with public-private-partnership and greater involvement of States.
Though Modi’s idea of a new institution has been well received by many former members of the Planning Commission, they want more clarity on the structure of the new institution and how the private sector’s role will be increased. The name doing the rounds for the new institution is ‘National Development and Reform Commission’. But, a formal decision is yet to be taken. In the next few days a clear structure of the institution will be in place, said sources in the Government.
It is being seen as a think-tank which will advise the Government on key economic and policy issues. It is likely to be headed by the Prime Minister, with State Chief Ministers, industry leaders and economists as members.
The Commission in its current avatar was set up through a Cabinet decision in 1950, with the Prime Minister as the Chairman, and modelled on the lines of the erstwhile Soviet model for planning economic growth. However, it does not find a mention in the Indian Constitution.
BK Chaturvedi, a former member of the Planning Commission and former Cabinet Secretary, told BusinessLine, “if it is purely a think-tank, then it will not serve any purpose.”
“We have to wait for the clear guidelines on the structure of the new body. Even in its existing set up the Planning Commission has almost two-third members who are not from the Government,” he said.
Kirit Parekh, another former member of the Planning Commission, while agreeing with the proposal that there is a need to restructure the body, has a word of caution. “Private participation is there in the present form as well. But, with industry involvement there is also a fear of them trying to influence the decision making with vested interests in mind,” he said.
States’ concern He, however, added that “there were instances of even States not liking the way funds were being distributed.”
Tamil Nadu Chief Minister J Jayalalithaa after her meeting with the then Deputy Chairman Montek Singh Ahluwalia in 2012 had expressed her displeasure with the Plan panel. “We have come to Delhi just to be told by the Commission how we should spend our own money,” she had said.
The Planning Commission essentially has been advising the States on the economic matters including discussions on their annual plan.
In fact, Modi, when he was the Chief Minister of Gujarat, had expressed his displeasure during the UPA-I regime (2004-2009) regime, when the Commission allocated funds directly to Mallika Sarabhai under a programme for Women Empowerment.
In fact, he lodged his protest with Ahluwalia and also with the then Information & Broadcasting Minister.
Saumitra Chaudhury, a former member of the Planning Commission, said, “It is the prerogative of the Government to restructure or replace any Government body. We will have to wait and see how the new body is designed. But the correct interpretation would be that new body is likely to interact more with the private sector which has a much bigger share in the economy.”