While there was virtual unanimity over conversion of the 64-year old body into a thinktank, some experts suggested the powers of allocation of funds should be handed over to the finance commission.
Although the plan panel has given up central planning over the last 20 years, it played a major role in allocation of funds to states. At present, the Constitution mandates that the finance commission determines the formula for sharing of central tax receipts among states while the Planning Commission determines the allocation of plan funds out of the gross budgetary receipts to states as per the Gadgil-Mukherjee formula.
The plan panel off late made some changes in rule that allowed states flexibility in using 10% of plan funds as per their requirement as compared with the earlier mandate of 5%. The plan panel during the last 10-year of UPA regime had been involved directly or indirectly in advising the government on many other policy issues ranging from PPP and funding of infrastructure to relaxation in the rules for forest clearances.
Former finance minister Yashwant Sinha, who chaired the meeting of experts, said: "We have discussed what could be the new avatar of the Planning Commission. They have all given some brilliant suggestions. All these (ideas) would be compiled and would be sent to the PM. We also discussed how should the plan be allocated to states as well as upon the autonomy status to be granted to the new body.
Sinha said it was a long standing need to reinvent the Planning Commission and the PM has taken a bold step.
Apart from Sinha, the meeting was attended by former RBI governor Bimal Jalan, former finance secretary Vijay Kelkar, ex-Planning Commission members Saumitra Chaudhuri and YK Alagh.
Another group of experts that included National Statistical Commission chairman Pronab Sen also discussed on the future course of action. "Old body is totally scrapped. The new body will come up and whatever body comes up, it will combine knowledge power along with some mandate for getting it executed," said Rajiv Kumar, an economist who had worked in finance ministry and CII.
Replying to a question on how the plan allocation to the states will be given, Kumar said it may be done through the Finance Commission.
Addressing the nation from the Red Fort on Independence Day, Modi had said the 64-year-old Planning Commission, a vestige of socialist era, would be soon replaced with a new institution to address the current economic challenges and strengthen the federal structure. "We need a new body with a new soul....We will have to think about giving a new shape to the Planning Commission.... Very soon this new institute will start working in place of the Planning Commission," Modi had said.
Among those who participated in Tuesdays meetings were BJP spokesperson MJ Akbar, senior journalists TN Ninan and TCA Srinivasa Raghavan, ICRIER director Rajat Kathuria, noted economist Surjit Bhalla and former finance secretary Sumit Bose.