At his last meeting with the present Planning Commission on April 30, its chairman, Prime Minister Manmohan Singh, wondered whether the commission was relying on tools and approaches designed for a different era, and suggested it subject itself to a critical review. He had flagged similar issues in 2009, too, when the present members joined the commission. At the time, the PM had pointed out how the commission had previously attempted to change, but failed. The commission had submitted itself to an external review in 2010. It was found that it is persisting with outmoded approaches and tools for planning. A study of the failed efforts to change has provided insights for a better reform strategy.
The external review, which was in consultation with 20 leading thinkers from the public and private sectors, pointed out that India and the world have changed immensely over the last 20 years. The private sector is a much larger part of the economy now and India is much more open to global markets. Indian politics has also changed dramatically — no single political party is dominant across all states of the country. Regional parties are powerful in the states and coalitions have become the norm at the Centre. These paradigm shifts in the economy and in politics make a central body that seeks to control the country’s progress through the allocation of money — which the Planning Commission was set up to do 60-odd years ago — an anachronism. India is now a flotilla of many independent boats. They must want to go together in the same direction. They cannot be ordered to.
For them to take good decisions for the stakeholders they represent, a national planning body now needs to provide these independent actors with a radar picture showing them the forces shaping the economic and social environment, revealing the paths to avoid and the paths that will enable faster progress. “Scenario planning” shows the way forward. Scenarios are based on an understanding of all the forces that are shaping the system. Not just economic but also social and political forces. Scenarios cannot be made merely by experts in ivory towers who rely on (incomplete and often inaccurate) numbers to explain reality. Many people, representing diverse points of view, must be engaged in a large, systematic process. Therefore, a 21st-century Planning Commission must become a central node in a large knowledge network. It should not have large numbers of experts within itself.
The mind of a 21st century Planning Commission might want to range further and faster, but it cannot if it is trapped in an ageing, lumbering body. The commission is stuck in the structure of a government ministry. Like every ministry, it has a secretary to whom all staff report. Their confidential reports (CRs) go to the secretary and then to the minister (the deputy chairman). Transfers are also managed by the secretary. The members, who are of the rank of and equivalent to ministers of state, have no right to comment on CRs or control over transfers. Thus, rather than the staff serving members, the commission (that is, the members) is a structural appendage to the “planning ministry”.
Previous attempts to reform the commission failed when they hit the brick walls of its internal organisation, which is embedded in the structures and rules of a much larger government machine that is very difficult to change. Therefore, an effective reform strategy must enable the commission to do what the country needs it to, without changing the planning ministry’s structure significantly. Such a strategy has already been devised.
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In this strategy, the members would leverage resources outside the commission for the knowledge required. They would also enrol support for the plans by engaging stakeholders extensively during their formulation, thereby also obtaining the stakeholders’ knowledge for making practical plans. In this way, national scenarios were formulated, a comprehensive strategy for managing the country’s water resources was developed, a manufacturing plan was made, etc. A new platform was also created to bring the states’ planning boards together to share best practices and develop a more constructive relationship between the state and Central planning processes. But this was not enough. Inertia in the internal organisation resists changes.
A two-pronged strategy is required to change the Planning Commission. While new functions must be strengthened, the planning ministry reforms must be in tandem with those of government. The Rangarajan Committee has recommended that the Planning Commission perform a strategic role in the country’s development and leave budget management to the finance ministry. The Second Administrative Reforms Commission made many good recommendations to revamp the government machinery and administrative services.
The answers to the questions the prime minister asked in 2009, and again in April 2014, are known. Solutions have also been formulated. The failure has been in implementation. Solutions must be implemented rather than the same questions being asked again and new inquiry commissions being formed to go over the same ground.