TRANSFORMATIVE PLANNING
Decommissioning the Planning Commission
Rabin Majumder Advocate & Attorney Law, New Delhi 1/20/2011 4:23:06 AM
British Raj sponsored program called Planning Commission ever since its inception in 1930s has been fairly doing well until 1991. However, under compulsion of BoP crisis, subsequently, India had to adopt economic reforms in 1991 which, in effect, embarked upon a program of short term stabilization combined with a longer term program of comprehensive structural reforms responding to the need for a system change, involving liberalization of government controls, a larger role for the private sectors and greater integration and synchronization with the world economy. And the obvious natural corollary is that, as some experts put it, Planning Commission changed its naming characteristic into “Reforms Commission”. In the recent past ever since reforms, Indian polity and policy have witnessed a major shift from long patronized mixed economy to open-market survival kit thereby changing Planning Commission perspectives from a symbol of power to what it is often referred to as ‘Reforms Commission’ that it acts more as an internal consultant to most central and state ministries and thus hosts a number of seniors bureaucrats, cabinet ministers, chief ministers, industrialists etc on a regular basis.
As Shri Montack Singh Ahluwalia puts it “the compulsions of democratic politics in a pluralist society made it necessary to evolve a sufficient consensus across disparate (and often very vocal) interests before policy changes could be implemented and this meant that the pace of reforms was often frustratingly slow… .” It is often opined that economic policy issues by its nature are controversial since it is the common knowledge that it is not a zero-sum game and hence, differences do exist, qualitatively and quantum-wise across the political spectrum. That is probably democracy which India witnesses.
From the beginning of end of British Raj until 1991, the economy was characterized by extensive regulation, protectionism, public ownership, pervasive corruption and slow growth. A revival of economic reforms and better economic policy in 2000s accelerated India's economic growth rate. According to a source, by 2008, India had established itself as the world's second-fastest
growing major economy. However, the year 2009 saw a significant slowdown in India's Gross Domestic Product (GDP) growth rate to 6.8% which was largely because of world economic slowdown.
Planning Commission where the majority of experts are economists, since its inception has undergone sea changes. It has present-continuous aim and humble functions, broadly, to assessment of resources of the country; formulation of five-year plans for effective use of these resources; determination of priorities, and allocation of resources for the Plans; determination of requisite machinery for successful implementation of the Plans; periodical appraisal of the progress of the Plan; to formulate plans for the most effective and balanced utilization of country's resources, to name a few.
Proximate Cause to Nosedive and Characteristic Shifts
The low productivity in India is a result of many instances, viz. agricultural subsidies, overregulation of agriculture, inadequate infrastructure and services and lastly but not the least, over-enthusiasm of politics sans polity.
The above blackheads in functioning of the Planning Commission are because, in practice, it takes a forced backseat while welcoming always politics minus welfare-state policy. More so, the government’s thirst for intervention in all spheres of economic and social activity has far exceeded its ability to achieve positive outcomes in any of them. The government sought to eat more than it could swallow. It is often felt that there has been a large gap between the theory of Government intervention and the practice of governance in India. The experts put it “theoretical accountability of politicians to voters is often thwarted in practice by sharing misappropriated public resources with special interest groups whose vote is critical to re-election”. All interventions are justified by the ministers and bureaucrats as in the public interest or in the name of the Aam Aadmi or both. The long-term natural victim is Planning Commission.
Lesson From the Past
As the economists put it, a prima facie lesson of Indian experience is that government monopoly is, in a low income democracy, more inimical to efficiency and growth than a private monopoly because regulatory capture is much easier in the former. This is because either policy, regulation and ownership functions are vested in the same government department (monolith) or regulation and ownership functions are overseen/ controlled by the same department. In contrast, in the case of private monopoly, regulatory capture can be impeded by two layers of accountability; First an independent professional regulator and then the government department (to appoint & over see the regulator). So, deregulation/decontrol is often cried for in a right perspective.
Constitution of India and Plan Process
The Constitution lays down the basic structure of a nation's polity which is built on the foundations of certain fundamental values. The vision of the founding fathers and the aims and objectives which they sought to achieve through the Constitution are contained in the Preamble, the Fundamental Rights and the Directive Principles. These three may be described as the nerve-centre of the Constitution and lately contended, Fundamental Duties has been given a thumbs up by adopting the principle of ‘basic structure’ theory of the Constitution enunciated by
the Supreme Court in 1973 in Kesavananda Bharati vs. State of Kerala as reported in 1973 (4) SCC 228. As to what are these basic features, the debate still continues.
The right to sustainable development has been declared by the UN General Assembly as an inalienable human right which recognizes that ‘human being is the central subject of the development process and that the development policy shall make the human being the main participant and beneficiary of development’. “Development” is defined as a ‘comprehensive economic, social, cultural and political process, which aims at the constant improvement of the well being of the entire population in development and in the fair distribution of benefits there from.
The Supreme Court has, in a number of judgments, referred to the importance of the Directive Principles. It has called these principles the “conscience” of the Constitution and also as the core of the Constitution. These principles are the “goals” to be achieved by Part III of the Constitution. They are intended to ensure “distributive justice” for removal of inequalities and disabilities and to achieve a fair division of wealth amongst the members of the society. The Supreme Court held that the courts can look at the Directive Principles for the purpose of interpretation of the fundamental rights. The Courts will adopt that interpretation which makes the fundamental rights meaningful and efficacious. The Courts have to make every attempt to reconcile the fundamental rights with the Directive Principles remembering that the reason why the Directive Principles were left by the founding fathers as non-enforceable was to give the Government sufficient latitude to implement them.
It may be particularly opined by almost all those who are concern that the Directive Principles cannot be confined to mere rhetoric or to ad hoc policies of electoral appeasement or handouts.
Any One-shot Solution?
That it is often opined that crisis prevention measures not only reduce the probability of crises occurring, they also reduce their severity if and when they do occur, which makes crisis resolution much easier. Hence, in the wake of economic liberalization and the world’s economic downturn and as per past experiences, a characteristic overhaul of Planning Commission from a highly centralized planning system of the Indian economy is suggested to gradually moving towards indicative planning where Planning Commission would concern itself with the building of a long term strategic vision of the future and decides on national priorities. Since, it is matter of common awareness that Planning Commission of India plays an integrative role in the development of a holistic approach to policy formulation in critical areas of human and economic development leading to multiplicity of agencies.
It is also felt that the effort of the Planning Commission, instead of looking for mere increase in the plan outlays, should be to look for increases in the efficiency of utilisation of the allocations being made making itself to play a mediatory and facilitating role, keeping in view the best interests of all concerned, ensuring a smooth management of the change and help in creating a culture of high productivity and efficiency in the Government.
It is in this backdrop, it may also be submitted that under new technology regimes, government management information systems and public accountability information system, with inevitable modifications and adaptations arising out of implementation experience, may considerably improve the efficiency and effectiveness of governance over the years through the Planning Commission.
Discussion
As has been often viewed, the plan process in Indian economy has suffered from a “chronic under-activity” of the government in some fields (particularly in basic education and elementary heath care, food, etc.) while being overactive in others (in the form in the so-called "license Raj" in particular). That probably the first time the Planning Commission in 1992 changed itself to as “Reforms Commission” which attempted to address the latter problem in a visionary way but it did not reach the goal. There is considerable evidence that the present Indian government, led by Sh. Manmohan Singh himself, is much more committed to removing that imbalance. The underinvestment in the social sector is now more fully recognized.
As has been felt, in order to revive investment and the confidence in Planning Commission aiming to contain fiscal deficit, achieving efficiency in the use of resources is need of the hour. And as Hon’ble Prime Minister Manmohan Singh opined "One consequence of scarce resources is that we should fully explore the scope for Private Public Partnership (PPP). This has been attempted in the infrastructure sectors where we have had some success, although progress has been less than what we would have wanted. We are taking steps to streamline the process so that PPP projects can move faster”.
Hon’ble Prime Minister further emphasized the present economic picture as a combination of strengths built up over several years, the lingering effect of the global slowdown and the temporary effect of the drought in the current year, particularly on agricultural output and food inflation. And he thus felt to build on the strengths and tackle the new challenges paying careful attention to the management of the food economy and the overall macro economy.
The Aam Aadmi are often pushed to appreciate certain disappointment in terms of the actual impact that Planning Commission policies has at the ground level. Most times, the outlays do not translate into actual outcomes. Lots of rational and well-intentioned policies are proposed by the Planning Commission, but the corresponding impact is not felt because of a myriad of implementation problems and mismatch of incentives that become apparent as one spends more time in the Planning Commission.
It is often viewed that not only is public reasoning, including open public arguments, central to the emergence and practice of democracy, the history of public reasoning is spread right widely across the world. While democracy is not without success in India, its achievements are still far short of what public reasoning can do in a democratic society, if it addresses less conspicuous deprivations such as endemic hunger. This is what Shri Amartya Sen has to say.
As India’s topmost internationally acclaimed economists opine that in the confrontation between a large and a small India, the broader understanding can certainly win. But the victory for the broad idea of India cannot be stable unless those fighting for the larger conception know what they are fighting for. The reach of Indian traditions, including heterodoxy and the celebration of plurality and scepticism, requires a comprehensive recognition. Cognizance of India’s dialogic traditions is important for an adequate understanding of the capacious idea of India. Prof. Amartya Sen has gone on record to say that primary education alone can save a country in the long run.
Conclusion
Success of Planning Commission which has been systematically given a characteristic shift to be a “Reforms Commission” would largely depend making a policy framework that would facilitate efficient production & regulation; secondly, an independent professional regulatory system that promotes competition & minimizes regulatory costs, thirdly, institutional innovation that breaks/reverses the deteriorating trend in efficiency & governance and lastly, government investment focused on public & quasi-public goods with the highest social return. And that can effectively be achieved if we should fully explore the scope for Private Public Partnership (PPP) benefiting the Aam Aadmi.
It is also suggested that Public Accountability Information System (PAIS) should emerge as a next step after the Right to Information Act which is a vital first step toward improvement of public accountability aiming to provide information to the targeted population about all major program and to empower the target beneficiaries to put up their own evaluation of the program alongside the government provided data & information which may be patterned on Amazon Books strategy, geographically multilevel, multi-layered system.
And it is graciously felt, if followed diligently, “decommissioning” the Planning Commission by way of PPP model as suggested and felt as above, would ensure long term successful implementation of Constitutional goals containing in its Preamble, the Fundamental Rights and the Directive Principles.
(The views expressed in the write-up are personal and do not re?ect the official policy or position of the organization.)
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