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The Ghost of the Planning Commission’s Past

The Ghost of the Planning Commission’s Past

By Vivek Bhattacharyya

Edited by Madhavi Roy, Senior Editor, The Indian Economist

After the Government of India did away with the six decades-old India’s apex body for planning for social and economic development, there has been much speculation about the Planning Commission’s (PC) successor. Will its functions be transferred to the Finance Commission, a constitutional body tasked with overseeing the distribution of net proceeds of taxes between the Centre and the states and between states? Or will it be modelled along China’s National Development Reform Commission (NDRC)? NDRC has achieved many developmental milestones in China, but the author argues that an intact export of this model won’t fit the Indian mould.

To explore the merits of that claim, the shortcomings of the PC have to be enumerated. PC loyalists often point to India’s admirable GDP surge in pre-2007 years as a proof of its effectiveness. But India achieved nine percent plus GDP growth rate during 2005-07 thanks to the American boom prior to the sub-prime crisis, as did other nations, globally. So pinning this growth exclusively on the Commission’s magic wand is a folly. And when the same supporters are asked to account for its lacklustre performance to revive the Indian economy after the crisis, answers are hard to be found.

Part of the above answer is in its command structure. It’s a toothless body, with no statutory or constitutional sanctity. It was conceptualized to aid and advice the Union Cabinet and so it can’t hold Union or State ministries or departments accountable for failing to achieve targets. On the policy front too, it failed to implement key reforms such as those of land acquisition and land tenancy. Policies were equally faulty for Micro, Medium and Small Enterprises (MSME), industrialization and Labour laws. It designed the Centrally Sponsored Schemes (CSS) with a ‘One-Size-Fits-All’ approach which makes no distinction between the development trajectory of the North-Eastern States, Jammu & Kashmir, and Left Wing Extremism (LWE) -affected states and that of Delhi NCR. Also, the PC’s secretariat was manned by members with a generalist skill set and short tenure, instead of skilled and specialized manpower. Not to mention its gaffe in recent times of fixing the poverty line. It set up two separate committees, under the chairmanship of C. Rangarajan and Suresh Tendulkar. The former committee placed the number of people Below Poverty Line (BPL) at 37 crore, while the latter at 27. So the PC conveniently adopted the parameters of the second committee and claimed the success of its efforts to fight poverty.

In the light of the above mentioned facts, even previous government regimes tacitly acknowledged its shortcomings. New bodies sprung up like the Prime Minister’s Economic Advisory Council and the Prime Minister’s Project Monitoring Group. With the absence of inter-body coordination, they fared equally badly.

Hence, one would agree with the incumbent government’s decision to scrap a concept riddled with more holes than Swiss cheese. But is merely exporting another model a viable solution?

The Chinese NDRC is a quintessential communist government body, with overarching functions such as macroeconomic policymaking, approving investment & construction projects, energy & oil policy and focus on the underdeveloped Western Provinces. In India, such functions are split amongst a multitude of separate bodies such as the Finance Ministry, Reserve Bank of India, Competition Commission of India, Foreign Investment Promotion Board, Ministry of Petroleum and Natural Gas, Directorate General of Hydrocarbons, etc. In a country like India where its constituent states are increasingly asserting their right by way of a federal polity setup, a unitary body will come short of accommodating the aspirations of different stakeholders, taking the whole process back to square one.

What we rather need is an independent research think tank which operates autonomously, wherein neither the funding parties nor the government interferes; and a meritocracy based recruitment, which does not becomea parking space for retired bureaucrats. It is a common phenomenon in private companies where it can be monetized in the form of more business for the firm. But this think tank’s research can’t be monetized, as it will be directed towards socio-economic public development. Therefore the funding must come through philanthropy. In India, where philanthropy is mostly routed for religious activities, this could pose a problem. Innovative routes such as funding such a think tank being included as Corporate Social Responsibility (CSR) according to the Companies Act 2013, is one such remedy.

Vivek Bhattacharyya majored in Electronics Engineering, and is a Foreign Policy and International Relations enthusiast. He was formerly associated with Non-Traditional Security Research Centre (NTS-RC) at Institute for Defence Studies and Analyses (IDSA), and Observer Research Foundation, besides having written extensively to The Hindu and the Indian Express on similar issues. Other interests include constitutional and international law, socio-political issues and literature. He believes human stupidity is a far bigger threat to mankind than ISIS, and can be reached at or

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