Manmohan Singh's dream team seems to be falling in place. The reconstitution of the Planning Commission, with Montek Singh Ahluwalia as its deputy chairman, is welcome. Not only does the choice of a professional economist over a politician augur well for the economy, the choice of Ahluwalia gives the same positive signal to the markets that the choice of Manmohan Singh as prime minister, and P. Chidambaram as finance minister, did. It’s not just the deputy chairman who is an economist. On board is Kirit Parikh, a good combination of common sense and economics, known for his contributions to the field of energy, poverty, agriculture and education; Abhijit Sen, known for his work on agricultural price policies; Anwar-ul-Hoda, one of India’s top experts on WTO-related trade and agricultural issues. In fact, all the members of the seven-member Commission are professionals. This is in contrast with earlier teams that often included politicians who catered to one constituency or another. The nature of the team is reminiscent of the American president’s Council of Economic Advisors, a team of professionals intended to be above populist and sectoral interests, working for the economy’s long-term interests. And, of course, the chairman of the new Commission is another professional: Manmohan Singh.What can be the role envisaged for this team of brilliant economists? As the economy becomes more market friendly, the role for a planning commission — once construed as the cornerstone of growth strategy — no longer exists. Its current role consists of running centrally sponsored schemes and allotting the funds to ensure this. There is no doubt that if the new team at Yojana Bhavan does this job, it will do it better than anyone else. However, it would be a pity if the mandate of the team remains limited to working within the box. The notion and design of plan expenditure is inconsistent with the sound delivery of public services that India badly needs. Local governments are in the best position to judge local needs, choose the best technologies and exercise effective control. The Centre is not in a position to decide local needs as, for instance, which is the best way to provide drinking water in every village. The one-size-fits-all approach is inefficient and often invites failure. India doesn’t really need these unfocused central schemes.The reconstituted Planning Commission should set itself the agenda of reform-linked and performance-linked allocation of resources to local governments. If the UPA government wants to be true to Rajiv Gandhi’s vision of panchayati raj, it must ensure that financial resources and the power to administer them are handed over to the panchayats. Indeed, the lasting contribution this team can make is to preside over the dissolution of the Planning Commission.
