Soon the entire format for granting approval to Annual Plans of states by the Planning Commission could change if the Rangarajan committee constituted on streamlining public expenditure has its way. The committee has pitched for greater interaction between the Plan panel and states prior to finalising their annual budgetary plans. In a recent presentation to the commission,the committee had recommended that state governments should be mandated to share the position of resource transfers with the Plan panel prior to passing their annual budgets. If this is accepted by the government,the process of granting approval by the commission to states annual plans would no more be a yearly ritual. Under the current system,states,represented by their chief ministers,visit Yojana Bhawan (planning commission) to have their yearly plans vetted after due deliberations. These discussions and approval are more ritualistic in nature as their (states) plans are barely 20 per cent of their overall budget. Approval is a fait accompli as state budgets are passed ahead of annual plan discussions, the Rangarajan committee observed in the presentation. Hence,it suggested that from now on,states would have to share information to the commission well in advance on the position of resource transfers,and the commission will have to conduct periodic review meetings in a well-designed format,which should be delinked from the approval process,sources in the Plan panel said. The committee had earlier recommended total abolition of the distinction between plan and non-plan expenditure in allocation of central government resources,a suggestion which did not go down well with the commission because a section of the planning body officials viewed it as dilution of the commissions decisive say over allocation of plan expenditures. The Rangarajan committee has also desired that the countrys apex planning body should be mandated to assess the total resources of each central ministries along with their internal and external budgetary resources while the finance ministry should compulsorily participate in the meeting organised by the commission to review their performance. The Plan panel should also indicate to states,in advance,the likely resources to be made available to them for different programmes to enable them prepare their respective budgets. The Rangarajan committee pointed out that the central plan scheme monitoring system should be extended to enable tracking of expenditure for all central schemes using both treasury and society routes to tackle the problem of reporting of direct transfers in the state treasuries. It favoured complete switchover to the treasury mode from the 12th plan period for all new schemes.
