The shrinking Plan

Technology has made the idea of decentralised planning tangible

Written by Bibek Debroy | Updated: March 2, 2017 5:23 am

I have quoted from this book in the past, but there is no harm in doing so again. This quote is from Alexander Campbell’s The Heart of India, published abroad in 1958. The book is “banned” in India. The word “ban” is often used loosely. This book has never been published or printed in India. The ban (Customs notification No. 49, dated March 11, 1959) is on imports into the country. It is an extremely patronising book, though that should hardly be a reason for a ban. There is a section about a meeting with Vaidya Sharma of the ministry of planning. “He (Vaidya Sharma) put away the housing development papers and talked again about the Five-Year Plan. ‘We have now entered the period of the second Plan. The first Plan built up our food resources; the second Plan will lay the foundations for the rapid creation of heavy industry. Delhi, as the capital of India, will play a big part, and we are getting ready to shoulder the burden. We are going to build a big central stationery depot, with a special railway-siding of its own. There will be no fewer than 12 halls, each covering 2,000 square feet. They will be storage halls’, and, said Sharma triumphantly, ‘we calculate that the depot will be capable of an annual turnover of 1,400 tons of official forms, forms required for carrying out the commitments of the second Five-Year Plan!’”

Richard Mahapatra is the Managing Editor and publisher of Down to Earth. In the current issue (February 16-28 2017), he writes, “Many old-timers, gathered around a Murphy Richards transistor in a library, would react to the approval of the five-year plan, as a grave voice of the newsreader would inform about allocations. In colleges, the economics professors would read out the new priorities to students and often, shyly, hint at lucrative academic opportunities and new subjects for applying for scholarships. Not going into the details of whether planned development did any good or harm to India, the five-year plans were always good experiences.”

I will not get into the merits/demerits of planned development, not only in terms of historical context, but also its continued relevance/irrelevance. (In view of the Campbell quote, perhaps I should have said reverence/irreverence.) As students, we were reverently taught, and studied, plan models. I don’t know if this reflects my jaundiced view, but the charm of plan models probably died out with the Fourth Plan (1969-74), at best, the Fifth (1974-78). Once rolling plans (1978-80) got going, plan models gathered moss. Incidentally, the number of equations in any plan model was almost entirely driven by the computing power one could rustle up.

In our student days, we rarely read plan documents and we certainly didn’t read annual reports of the Planning Commission. Let me now quote from the 1977-78 Annual Report of the Planning Commission, during the rolling plan era: “The Commission has suggested two new developments in the evolution of the country’s planning methodology, viz. (a) the adoption of the rolling plan system and (b) the preparation of comprehensive area development plans at the block level. Year-to-year targets will be set for sectoral outlays and output for major sectors within the Five Year Plan; performance against these targets will be reviewed annually… There is no basis for the apprehensions expressed that the introduction of a Rolling Plan system would mean the abandonment of long-term objectives, reducing the commitment of resources for development, and freeing the implementing agencies from any accountability for non-achievement of targets. The modifications proposed will not mean either the abandonment of perspective planning or the replacement of the discipline of a five-year framework by ad hoc annual decision-making. A new 15-year perspective plan will be prepared for charting the longer-term course of development of the economy as a whole. The Perspective Plan would provide the framework for investment decisions in long-gestation projects for which a five-year horizon is inadequate, and for planning for land use, water resources, oil and mineral development and manpower.”

I have refrained from quoting from the decentralised planning sections. In hindsight, both ideas seem prescient and both have a rationale, though Vaidya Sharma wouldn’t have approved. Decentralised planning lacks the raw appeal that centralised mathematical models possess. Even now, students are fascinated by the Oskar Lange kind of idea of a central planning board completely replicating the market through a tatonnement (trial and error) process. Note that decentralised planning received lip service since the First Plan (1951-56) — District Development Councils were formed, the Planning Commission formulated guidelines for district planning in 1969. A Manual for Integrated District Planning was prepared by the Planning Commission in 2009. The last quote is from that manual: “From the late sixties to the mid-eighties, the trend was towards greater centralisation of administration. Due to the absence of concerted political and administrative support, panchayats had by the late sixties been superseded in most states. The formulation of Centrally Sponsored Schemes (CSS), implemented mainly through line departments led to the virtual collapse of the district planning process. Though there were several efforts to stem the tide, (Dantwala Committee, G.V.K. Rao Committee), these were largely unsuccessful.”

The supercomputers of the 1970s were primitive. Forget those, in its heydey of modelling, the Planning Commission didn’t have access even to mainframes. But that remained the aspiration and decentralised planning seemed to replace it in every district with what are now called tablets.

The writer is member, Niti Aayog. Views are personal

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