By Sudha Pillai
A meeting of chief ministers will be chaired by the prime minister tomorrow to discuss the structure and functioning of the body that will replace the Planning Commission. But till such time as the new body is created, the commission is to continue with its “mandate”.
The Planning Commission, set up in March 1950 by a resolution of the government, had neither statutory nor constitutional backing, but derived some of its authority from the Directive Principles. The resolution charged the Planning Commission with the responsibility of making an assessment of the material, capital and human resources of the country and investigating the possibilities of augmenting deficient resources; formulating a plan for the most effective and balanced utilisation of resources; determining priorities and defining stages in which the plan would be implemented and proposing the allocation of resources; indicating which factors tend to retard economic development and determining the conditions needed for execution of the plan; appraising the progress achieved in execution and recommending appropriate adjustments. The commission was to be “an organisation free from the burden of the day-to-day administration, but in constant touch with the government at the highest policy level”. It was to make recommendations to the cabinet and was expected to act in close understanding and consultation with the Central ministries and state governments. While finalising the contours of the new body, the original mandate and history of the commission become interesting. Over time, the commission moved away from its original mandate in significant ways.
While the commission engaged in wide consultations for the formulation of the five-year plans, the way in which the approach document and draft plan were placed before the National Development Council was not rigorous enough. A day-long meeting of the NDC does not give enough time or space to the CMs. Many CMs feel that their role in the council was simply to endorse the approach or draft plan. While issues raised by them were noted and, sometimes, sub-committees set up, all meetings ended in the approval of the documents.
The formulation of the annual plan of ministries would also entail much dialogue — between the commission members and ministry secretary, for example. The ministry’s performance would be discussed and their draft proposals examined. Simultaneously, interactions would commence between finance ministry secretaries and the secretary of the Planning Commission, on the size of the annual plan and the gross budgetary support. I remember at least half a dozen such meetings but no unpleasant tussles. The PM had the final say on the gross budgetary support. Within that overall ceiling, ministry proposals would be chiselled, pruned and sometimes enhanced.
The formulation of the annual plans of the states also required a 60 to 80-day cycle: accounting for many interactions on the assessment of state finances, the formulation of the draft plan, meetings between the chief secretary, concerned member and secretary of the Planning Commission. The process culminated with the meeting between the CM and deputy chairman, and the announcement of the final size of the plan. Two elements of this exercise — the announcement of the rather tiny special plan assistance/ special Central assistance, which would matter more to the smaller states, and the fact that, in many cases, the plan discussions would take place after the state budget had been introduced — lent a certain piquancy to the proceedings.
For the Central ministries, the commission has been both helpful and problematic. The problem can be traced to the establishment, in 1972, of the project management and appraisal division (PAMD) in the commission, which was set up to institutionalise project appraisals and undertake techno-economic assessments of all plan projects and schemes. The PAMD, whose approval would be required for all proposals exceeding Rs 50 crore, acquired huge clout. The six-week time limit prescribed for it to give comments was viewed as “indicative”, and important schemes announced in the budget would not be able to take off for several months. My main job as secretary was to expedite these “in-principle” approvals, having been on the receiving end as labour secretary. In fact, I feel such case-by-case scrutiny is a major departure from the role originally envisaged for the commission. Here, a brief mention cannot but be made of even later developments, such as the committee on infrastructure and the scrutiny by this division of each and every road to be built through PPP, the delays and the lack of accountability inherent in this process and the extreme sense of power that it engendered.
The new commission would be better off without these add-ons, so that it can do its own work. The Planning Commission certainly championed the cause of ministries and the poorer states, and held several friendly-but-serious tug-of-war discussions with the finance ministry. But its sitting in judgement over schemes and projects, its assumption of superior wisdom and power without accountability turned it into a bugbear. In the final analysis, it diluted the focus on its core activity. If today we have a shortage of doctors, teachers and civil engineers, it is not due to an excess of planning, but to its deficiency.
The writer is a former member secretary, Planning Commission