The all-powerful Planning Commission may shrink, made more accountable, and forced to think long-term under the new government. Prime Minister-designate Narendra Modi is likely to dilute its over-arching financial powers and convert it into a developmental think-tank.
Five Year Plans, the main mandate of the Planning Commission, may be scrapped. Instead, the panel may have to draft plans with 10-30 years on its horizon. The 12th Five Year Plan ends in 2017.
The Planning Commission was set up by India’s first Prime Minister Jawaharlal Nehru to assess funds available to with the government and how best they should be spent for social and economic growth.
While abolition of the plan panel set up through a Cabinet resolution of 1950 may not happen soon, Bharatiya Janata Party (BJP) sources say Modi as PM — the panel’s new chairman — would review the commission’s functioning and may opt for a more “empowered” central ministry over the commission.
States may also have more say on utilisation of central funds, a point emphasised by Modi during his interaction with plan panel functionaries as Gujarat chief minister.
The panel should be a facilitator for the states to get central funds and promote decentralised decision-making, he had said at Planning Commission meeting in 2013.
A source close to the PM designate said: “Modi is not fine with the job that the panel has been doing. Given his agenda to quicken the economy, he plans to remove bottlenecks and hurdles. He may review the role and functioning of the panel, one idea being to wind up the body.”
Modi’s views to some extent were echoed by outgoing PM Manmohan Singh who, in his farewell speech to panel members on April 30, sought “reorientation” of the panel and emphasised on changing its role in the “new world” of an open and liberal economy.
The panel, which disbursed Rs. 4,310 billion crore of plan money in 2013-14, was criticised recently for over-regulation of ministries and state governments. It allegedly curbed states’ flexibility in forming policies to attract investment. It has also been criticised for lowering the poverty line.
“Not a single penny of plan funds can be spent without the panel’s approval. This wasn’t what Nehru had in mind,” said a senior panel official, requesting anonymity.