Plan outlay for states now uncertain: Abhijit Sen
Abhijit Sen, who was member of the now-disbanded Planning Commission during the 10-year regime of the United Progressive Alliance (UPA), has raised doubts over the economic approach of the Narendra Modi regime. The disbanding would boomerang, and there were doubts whether the proposed increase of the states’ share in central taxes could work out actually in real terms of central funding, Sen said, in an interview with HT special correspondent Prabhjit Singh on the sidelines of a seminar in Chandigarh.chandigarh Updated: Mar 15, 2015 11:07 IST
Abhijit Sen, who was member of the now-disbanded Planning Commission during the 10-year regime of the United Progressive Alliance (UPA), has raised doubts over the economic approach of the Narendra Modi regime. The disbanding would boomerang, and there were doubts whether the proposed increase of the states’ share in central taxes could work out actually in real terms of central funding, Sen said, in an interview with HT special correspondent Prabhjit Singh on the sidelines of a seminar in Chandigarh.
HT: After 10 years on Planning Commission, how do you feel now when the new regime has disbanded it?
Sen: Planning Commission is no more, which itself is evidence that the plan outlay earlier decided by it under the (flagship) schemes for the states is now uncertain. The plan expenditure (for the states) was cut drastically in the past three months. It is going to boomerang, and we will come to know gradually. Disbanding was done in the name of political dominance over bureaucracy, but actually it is the PMO (Prime Minister’s Office) only that is controlling even the secretaries in different ministries, with the ministers left with very little say.
You had dissented in the 14th finance commission on certain policy matters. What were those?
I had asked for a gradual increase in the states’ share in central taxes instead of increasing it abruptly from 30 to 42%. Implementing my suggestion, which was to increase it by 5% initially, would give enough room to the government in assessing the fallout. It is doubtful whether this abrupt hike in the state’s share would lead to the actual increase in the transfer of overall capital from the central pool. The plan outlay under certain central schemes for the states has been shut down already; and who will deal with this capital that was earlier going to the states?
What difference in terms of economic approach you see between the UPA andModi regimes?
It (Modi regime) is a kind of system where the PMO is the most important place on top of the ministries and the bureaucracy; the secretaries of the ministries know that reality. The officers also know that the ministers are being bypassed for key decisions, which now come from the PMO. (Laughs) But this dominance of one party, rather one man, the Prime Minister, over key decisions such as packaging the sector-wise plan outlay for the states is not going to continue for long. You cannot have a chief minister of India, we need a PM not a CM.
On the ideological front, you were very different from (former Planning Commission chairman) Montek Singh Ahluwalia, with whom you managed to work for 10 long years. How?
Yes, I had my disagreements with Montek. He was very clever, but (the-then prime minister) Dr Manmohan Singh needed me to counter Montek (laughs). The job-guarantee plan is an example of something Montek had a big problem with (during UPA-1); but then the Left (parties) was also in power, and it (job-guarantee plan) worked. We also had difference of opinion on the balance between the social sector and the infrastructure development under the PPP (public-private partnership) mode.
What is your take on the corporate sector’s social responsibility (being talked about)?
Well, First there has to be a moral standing in abiding by the law in this regard, which requires by the corporate houses to spend a minimum of 2% on the social sector. Then we need to analyse that the same companies who show expenditure on social sector use it for tax rebate. Twists and turns are given to recover the expenditure in the name of promoting social cause.
What can Punjab do to revive its economy?
Your (Punjab’s) Manpreet Badal was a gutsy finance minister, who was all for doing away with the ‘arhtiya’ (commission agent and private money lending) system. We (the Planning Commission) had taken the actual plan expenditure of Punjab to a high of 97%. But then you see the overall drastic cut in the plan (for all states) by this present government. Chief minister Parkash Singh Badal has been concentrating on his own constituencies instead of the entire state.