Opinion A four-year plan?
With Montek Singh Ahluwalia acknowledging that the Planning Commission is losing its relevance,its time his idea is taken to its logical conclusion.
With Montek Singh Ahluwalia acknowledging that the Planning Commission is losing its relevance,its time his idea is taken to its logical conclusion. The idea is to shake up Yojana Bhawan from its current stupor and transform it into a buzzing and independent think-tank that doubles up as coach and consultant to the government of India and various state governments. This would not require an army of employees (its staff strength is some 600-700 now). Ahluwalias predecessor K.C. Pant,a politician,too tried to restructure the Planning Commission mid-way during his stint,but did not appear to have it in him to get rid of old baggage.
Ahluwalias first step of assigning to Arun Maira,who headed global consulting firm Boston Consulting Groups India operations,the task of drafting a blueprint gives us some hope. He will bring fresh thinking to the table. Another aspect that is encouraging is the time that Ahluwalia has to make the transition happen. This is the first year of the new United Progressive Alliance government,and it is not dependent on the
Left parties for survival. So,there is time,and scope as well,for manoeuvrability.
Over the last two decades,the Planning Commission has metamorphosed into a stodgy government set-up that does just routine work. It prepares grandiose five-year plans,argues with the finance ministry for higher budgetary resources for the Central Plan and derives a false sense of satisfaction by giving a bit more money to states in support of their plans. Ahluwalia need not take any offence,because this is not a reflection of the individual that he is,but the general impression that the Planning Commission has left on many in the government and outside today. Of course,the personality leading the Planning Commission as its deputy chairperson does define the importance of the office for the limited period he is at the helm.
As can be expected,it is tough to break free from the past. The Planning Commission was set up six decades back in an environment where the state controlled the economy,or almost everything that mattered. Over the years,it has evolved,but only to mirror the functions of the Central government across its various departments and ministries. Yojana Bhawan today has about 28 divisions with overlapping functions,each closely tracking Central departments and ministries in addition to reviewing state plans. Advisors and research officers in the Planning Commission end up with little expertise in any given sector since they are shifted between verticals to suit career objectives as laid out in the bureaucracy. At the top,both the deputy chairperson and the members are political appointees. Each member oversees a sector or two and with it is bundled the responsibility of monitoring some states.
The Planning Commission,we all know,prepares a five-year strategy for the country. It also reviews it once by undertaking a mid-term appraisal,as is being currently done for the Eleventh Five Year Plan (2007-08 to 2011-12). Every year it negotiates with the finance ministry the size of the budgetary support to the plan. This process is on now for Budget 2010-11. It vets the expenditure proposals of various departments and ministries. Besides,it discusses the plans of states with chief ministers dropping in every year at Yojana Bhawan to make a case for higher resources. All of these,though appropriate in an old economy milieu,had an inherent flaw they left the Planning Commission without any real understanding of the effectiveness of the plans and programmes it conceived. Yojana Bhawan relied on information fed by other ministries and states. So,in a sense,it was disconnected from ground reality. Moreover,there is no mechanism for the commission to systematically understand and integrate the increasing role of the private sector in the Indian economy.
What is in it for the Planning Commissions deputy chairperson personally? It is important to answer this question because,as I noted earlier,the Planning Commission derives its character from the person who heads it. The deputy chairperson has the rank and status of a cabinet minister,and is a special invitee to cabinet meetings. But besides that,the only clout he enjoys is his limited discretionary power to hand over some extra funds to states. Surely,Ahluwalia or anyone else can live without that. Who heads the plan panel is also significant for the institution that Yojana Bhawan is. If the deputy chairperson is a strong politician,he can use it as an effective vehicle to ply the ruling partys political and economic interests. Everyone stops by Yojana Bhawan then. If it is someone like Ahluwalia,in whom the prime minister has faith,then the person tends to become more important than the institution. But to be fair,in his second term as deputy chairperson,Ahluwalia has inducted lateral expertise.
Yojana Bhawan will be worth a visit irrespective of its occupant only when it dumps its legacy and infuses global expertise and talent. It needs to become an independent think-tank,providing unbiased public policy opinion. It will serve Indias development needs well by identifying key medium-term and long-term imperatives. Further,working papers by members can be the starting point for meaningful discussions,finally leading to coherent policy decisions. Of course,being a government entity,the Planning Commission can be a consultant to the Centre and states on issues that are referred to it. And for this,it need not have a staff running into hundreds.
To present a palatable transition framework,Maira may want to suggest that even as the Planning Commission builds a lean and impeccable team of experts and consultants,it continues to fulfil its existing responsibilities. He may,however,like to attach in the annexure of his report a BCG Matrix,differentiating the cash cows and stars from the dogs and question marks,amongst the existing offerings of the Planning Commission.
pv.iyer@expressindia.com
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