Planning Commission overhaul started under UPA govt: Ex-members

Aug 19 2014, 00:51 IST
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PM Narendra Modi is set to create a super thinktank in place of the Planning Commission. (PTI) PM Narendra Modi is set to create a super thinktank in place of the Planning Commission. (PTI)
SummaryThe revamping of the centrally sponsored schemes effectively giving states greater freedom in deciding how the Plan funds allocated to them would be spent.

While PM Narendra Modi is set to create a super thinktank in place of the Planning Commission, the latter has indeed moved a lot in the direction of being an advisory body in recent years. Senior former Planning Commission officials, including some of its former members FE spoke to, recalled how even the UPA government led by Manmohan Singh was planning a similar role transformation for the body that, some of them conceded, has come to be a “parking lot” for civil servants resistant to change for their sheer survival instincts.

The revamping of the centrally sponsored schemes effectively giving states greater freedom in deciding how the Plan funds allocated to them would be spent was also a step in the direction of cutting the remit of the commission, a vestige of the Nehruvian era and now recognised to have outlived its purpose.

In fact, the writing on the wall over the future role of the commission was clear from UPA finance minister P Chidambaram's interim budget where, of the central assistance for states and union territories, the component of funds that goes straight to state treasuries was trebled to R3.39 lakh crore for 2014-15 from a revised estimate of R1.19 lakh crore in 2013-14. The budget support for the Central Plan (the component routed through ministries via the commission) was slashed to R2.17 lakh crore from 3.56 lakh crore.

Modi's finance minister Arun Jaitley followed the same pattern in his maiden budget on July 10 as he tinkered with the figures a bit —the central aid for state and UTs for FY15 was put at R3.38 lakh crore while the support for the Central Plan was revised to R2.37 lakh crore.

For the record, the commission's role practically includes an involvement in designing India's medium-term economic strategy through the formulation of Plan targets and priorities. But its primary function is to determine the (quantum) of allocation of Plan funds out of the gross budgetary support it receives to states, as opposed to the constitutionally mandated role for the finance commission which evolves the formula for sharing of central tax receipts with states.

Says Arun Maira, who was a member of the commission during UPA rule: “Narendra Modi has caught the bull by the horn. The commission has become old, large and also part of a large system where civil servants get a parking lot. It was the resistance from these

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