Opinion No little plans

Prime Minister Narendra Modi’s unusual delay in appointing a deputy chairman for the Planning Commission, and the unprecedented decision to leave it out of deciding budgetary support for the railways, has led to speculation that this government may downsize, neglect or even abandon the agency altogether. This does not sound farfetched given that Modi, as chief minister of Gujarat, and other BJP CMs have often disparaged the agency, set up in a distant socialist 1950 by a cabinet resolution. While the Commission has changed character over the years, becoming less of a central overseer and more of a direction-setter in an open economy, many states chafe at a situation in which the major part of social and economic planning falls to them, but they still have to go to Delhi to get their plans approved, justify their policy priorities. Moreover, Central funds are tied, with the Commission instructing them on the ways they are to be spent. The BJP manifesto had hinted at a restructuring of the Centre-state relationship, building direct links between the PM and CMs and potentially bypassing the Commission’s forums.

But it may be facile to write off the Planning Commission merely as a bunch of out-of-touch advisors or as a vestige of a socialist world. It provides necessary coordination between ministries, and reconciles their priorities. It also brings a very important long view for policymaking. In recent years, the Commission has put together an integrated energy policy, taking views from several ministries and bringing an independent vision to it, and it has drafted models for public-private partnerships that states have used. Centrally sponsored schemes are meant to nudge outcomes in ways that the elected state government may not consider critical, even though they often end up trammelling the state too much. This work can arguably be outsourced to consultants or research groups, but they would lack the institutional memory and holistic imagination of the Planning Commission. Its role cannot be given over to the Finance Commission, which makes automatic payments based on a preset formula but lacks intelligence about specific sectors.

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From Modi’s perspective from Gujarat, the Planning Commission may have been a superfluous busybody, playing preferential politics, attaching strings to money intended for the state’s use. But coming to Delhi may already have modified that view. There is near unanimity that the Commission must undergo deep reform. This is what Modi must insist on. That involves reducing the budgetary role and taking on a better agenda-setting role, inviting expertise from specialists, and keeping in better touch with political priorities.