The decision of the NDA government to scrap Planning commission and bring in its place an alternative body, has received mixed responses.
The meeting of Chief Ministers and Lt. Governors of various states called by the PM did not see a consensus on the issue. Everybody was divided on political line. It is a classic case of politics triumphing over economics.
Those who are opposing are demanding restructuring and reorientation of the body.
However the govt. is firm on scrapping the planning commission which was setup in 1950.
Planning commission had 3 important functions:
- Finalising the State plans and additional central assistance plans
- Act as a link between the centre and states
- Be an overarching guide to the states and the centre in respect of allocation of resources to different ministries for approved plan schemes
The first function, mentioned above, has already been transferred to the ministry of finance.
The new body is expected to perform the following functions:
- The body would help to improve the relationship between the centre and the states in the spirit of operative fiscal federalism.
- It would act as a strategic think tank in order to invest an informed decision making ideas, innovations and strategies for both short and medium term.
- New mechanism for transfer of cash in terms of unique identification scheme and in terms of monitoring projects.
Some people are opposed to the new idea. And they say that all the new functions can be subsumed with the existing ones.
The functions of the interstate council need to be enlarged.
Since the liberalization, the nature of the economy has changed. But these things are not taken into consideration in the planning process.
It is also being said that the new body, instead of promoting cooperative and fiscal federalism, is expected to increase the centralised tendency.
The way in which the scrapping of the planning commission was announced is also being criticised.
The planning commission was set up by a Resolution of the Government of India in March 1950 . It is not a constitutional body.
The new body should strengthen the interstate cooperation through reactivating interstate council.
Individual personalities have often mattered more than the institution in Planning Commission.
Lack of clarity over the new body is adding to the problems.
12th plan might also be affected due to scrapping of the commission.