By Shivaji Sarkar
The Narendra Modi government etches out a new economic plan with a stress on federalism. It is a subtle answer to repeated Congress criticism that he had been following its agenda during the first 60 days.
Modi has given the roadmap to his economic concept in nuances. All the same despite verbal praises on all previous prime ministers, and that means Manmohan Singh – who said Modi would be a disaster – as well, he has junked the very idea of Congress-led economy and the bureaucratic structure.
His severe barb at the Planning Commission and promises to cast it in a new mould is the result of his humiliation as chief minister by the commission led by deputy chairman Montek Singh Ahluwallia during the last ten years when he had to knock on its doors for money. Modi criticises it for being a monolith that did not listen to the aspirations of the people – a severe indictment of the bureaucratic functioning of the commission. The commission was degraded to such functioning since UPA came to power in 2004.
Modi never had a high opinion of the Planning Commission — as leader of the industrial powerhouse of Gujarat, he stunned the panel in 2013 by turning up at a meeting with a video that accused it of high-handedness and hobbling the states with one-size-fits-all policies. This June, a government-backed report suggested replacing the Planning Commission with a think tank more in line with a US-style council of economic advisors.
“Since the Planning Commission has defied attempts to reform it to bring it in line with the needs of a modern economy and the trend of empowering the states, it is proposed that the Planning Commission be abolished,” the report said.
Many other chief ministers including AIADMK leader J Jayalalitha, BSP leader Mayawati and even some of the Congress chief ministers had been critical of the way the bureaucrats used to heckle the elected leaders during their interactions. In 1960s, Congress stalwart and the then UP chief minister CB Gupta and West Bengal chief minister BC Roy had expressed their unhappiness at the highhandedness of the commission to Jawaharlal Nehru, the man credited for setting it up on March 15, 1950.
The Planning Commission does not derive its creation from the Constitution, but is an arm of the central government functioning under the prime minister. Its beginning was in 1938 by Netaji Subhash Chandra Bose, when he was the Congress president and drafted by Meghnad Saha.
It has also been observed that commission, a link between the Centre and the states functioned in a more congenial manner whenever it was headed by a politician as its deputy chairman. In fact, till 2004, except for brief interregnums it was headed by illustrious persons including Gulzari Lal Nanda, Ashok Mehta, DR Gadgil, Mohan Dharia, Pranab Mukherjee, PV Narasimha Rao, Madhu Dandavate, Jaswant Singh and KC Pant. Despite some complaints, it was observed that the political personalities used to give a better hearing to the pleas of the state chief ministers.
The very concept of federalism was virtually given a short shrift by the commission during the last ten years of Ahluwallia as deputy chairman, leading to many complaints by the states.
What Modi said about “a new institution” is to rectify that. Now as per his plans chief ministers would have a better voice to decide on their needs. In all probability some of them would be part of the new body.
The move is to stop their derision by bureaucrats, who often in the corridors of the Yojana Bhavan, used to make fun of the chief ministers. Some of them even were heard saying that certain chief ministers were coming with “begging bowl”, as if the states did not have any share in the revenue collected by the centre.
Even after the new economic order in 1991, the commission’s relevance was questioned and some had suggested it be wound up. But it was realised, despite many failures, it has evolved as an institution to centrally oversee investments and development of the country. So it was retained.
Even Modi did not exactly say he would scrap the concept. His stress is on the institution with a new mass-based federal character. Whatever it might have developed, there is one great utility of the plan panel. It remains a “think tank” for this vast country. Modi realises it. So he does not say that planning process would be over. He has indicated that the federal structure would be strengthened so that the tank has enough brains and there is holistic approach in the thinking process.
The announcement was received with a positive spirit by the industry. “Creative thinking is required for building a new India with public private partnership and optimum utilization of resources and power to the states,” the Confederation of Indian Industry said.
The Congress certainly did not like it and slammed the idea. It cannot digest that a new government could come out with a new mass-based policy junking an inefficient organisation that it is credit to have created.
Till date the commission has overseen investment of over Rs 15 lakh crore since the first plan. There were periods of plan failure, called plan holidays between 1966 and 69; rolling plan during Janata Party rule in 1978-80 and annual plan 1990-92.
It is not the end of Planning Commission. The BJP has backed the idea of reforming the panel and wants it to operate it as economic think tank so that it could provide effective delivery of public services.
Bur certainly the new body would not be allowed to build toilets for Rs 39 lakh that Ahluwallia did in 2012 and decide the poverty line at Rs 27 a day spending. Possibly it would also not be “parking lot” for unwanted bureaucrats, as once BJP leader Arun Shourie had said.
The name for the head of the new body or the old body may be with a new name has been almost finalized. His name may be announced shortly with a new guidelines and structure that are to be announced in the coming days setting a new course for the economy.