A Pessimistic Look on the Planning Commission.

A Pessimistic Look on the Planning Commission. India's bedrock is the Constitution. Anything not in the Constitution should be abolished. The Planning Commission (PC) is an extra-Constitutional body. It was set up through executive order in 1950. It has no business to exist. Second, under the Constitution, public expenditure is scrutinised and approved by Parliament. As an extra-Constitutional body, PC is not answerable to Parliament. Third, fund-flows to states take place through Finance Commission, PC and Central sector and Centrally-sponsored schemes (CSS). We have diluted Finance Commission mandates since late-1960s and early-1970s. Union Finance Commission is the mandated Constitutional body for Centre-state transfers and state Finance Commissions for intra-state transfers. If Finance Commission's original mandate is restored, we won't need fund-flows to states through PC. Discretionary transfers to states haven't incentivised reforms in states. Annual Plan discussions are a nuisance. In an era of reforms, we need more transparency and less discretion. See how backward regions' grant-fund has been mis-utilised and special category status for states abused. This is an era of decentralisation. No one knows the number of Central sector schemes and css. They have proliferated since late-1960s. At one point, the number was 455. It was pruned to 150, but have proliferated again. We were perfectly happy when they didn't exist, before 1960s. They impose Centralised templates from above, regardless of local conditions. This year's Budget also recognises the Plan/non-Plan distinction as artificial. Even if this distinction goes, as it should, and we eliminate CSS, there is no need for PC. Fourth, PC has been unable to push decentralised planning. In terms of mindsets, it makes things worse by its unwillingness to do so, as if all wisdom is vested from above. Witness the confusion it has created over poverty numbers. BPL should be determined through decentralised and participatory identification by gram sabhas and urban local bodies. Why should pc muddy waters? Fifth, there are plenty of research bodies outside the Government that can do research now and produce data. PCs utility in these is questionable. Sixth, it has no imagination. It continues to produce Plan documents and approach papers that are rehashes of First Five Year Plan. There was a time when there used to be models for growth emanating from PC. That was because PC had the task of directing resource flows. In this era of reforms, no one can direct resource allocation. It is determined by markets, with a role for the private sector. Several regulators and ministries outside PC have been empowered. What role can PC have now? Its projections go wrong. Had this occurred outside the government, PC would have been wound up long ago. PC was supposed to subject itself to a zero-based budgeting (ZBB) exercise, reinventing itself and justifying its existence. But nothing has moved. All that happens is PC triggers squabbles with other ministries, departments and states, often in public. Seventh, it is a parking spot for retired bureaucrats and failed politicians. The intention is not to tap their expertise. They are parked there because they will create the least nuisance there. In addition, positive affirmation and reservation quotas characterise membership. This is true of other commissions too. But what's true of other commissions is also true of this. It should be distinguished through an act of omission. Who has computed resources that will be freed up if PC is abolished? This includes studies and advisers too, not to speak of accommodating those from the Indian Economic Service. These are resources with opportunity costs. Eighth, it commandeers an unnecessary quota of Padma awards. Ninth, at least two respected economists resigned from pc because it had doubtful utility. Milton Friedman was brought in early-1950s and left in horror. Manmohan Singh resigned as deputy chairman in mid-1980s, when the then prime minister Rajiv Gandhi called PC a bunk of jokers. There were others who resigned too, like B.S.Minhas, but that is a separate story. How can we question economists like Friedman or Singh and Rajiv Gandhi? Nine excellent reasons. PC is not a cat, it shouldn't have nine lives. - Bibek Debroy is a professor at Centre for Policy Research, New Delhi