Financial powers out of Yojana Bhawan, Planning Commission stares at shutdown

Written by Subhomoy Bhattacharjee | Surabhi Rastogi | Surabhi | New Delhi | Updated: Jun 21 2014, 15:25pm hrs
Montek Singh Ahluwalia-ModiMontek Singh Ahluwalia has already resigned as Deputy Chairman.
A television monitor in the lobby of the Planning Commission which used to run the schedule of meetings planned for the day when Montek Singh Ahluwalia was Deputy Chairman, now displays Thoughts for the Day.

Ahluwalia has resigned, and for the first time since the Planning Commission was set up in 1950, it will not decide on the gross budgetary support for the Railways.

Instead, the Finance Ministry has scheduled a meeting later this month to decide the Plan budget for the Railway Ministry.

The moving of financial powers out of Yojana Bhawan formalises the end of the role of the Commission, and marks the biggest change in the Indian fiscal space in decades.

Minister of State (Independent Charge) for Planning Rao Inderjit Singh made the nature of the change clear in a brief conversation with The Indian Express. He indicated the government was in no hurry to appoint a new Deputy Chairman of the Planning Commission.

Things are in a state of flux. It still has to be decided by the Prime Minister if a Deputy Chairman is to be appointed, Singh said. It has been a Cabinet-level post in every government so far. We will decide later.

A source said the decision to give the Finance Ministry charge of allocations for state and central level ministries shows the Commission will not function in its present form any longer.

As a result, while North Block has passed under the security blanket of the intelligence agencies that precedes the laying of the Budget, no such instructions has been issued for the Planning Commission, unlike in past years.

Ahluwalia declined to speak on the subject. Former Member Saumitra Chaudhuri said, We had all stepped out by May 27th from there, vacating our offices. Most of what was on the Members tables has since been transferred to Secretary-level officers posted as principal advisers at the Commission.

Former RBI Governor Bimal Jalan, who has also been a member in the Commission, said it would be better if the plan panel works on monitoring implementation of projects. I dont mean it should be checking how much money allocated has got spent, but it should check the progress of projects cleared by the state and central governments, he said.

A committee headed by C Rangarajan said in 2012 that the distinction between Plan and non-Plan should be done away with. Arun Jaitleys Budget is expected to be the first one to implement this recommendation.

Since the interim Budget had already transferred most centrally sponsored schemes to state governments, the Commission, in any case, has little substantive role to play in the allocation of funds to states. Each state government has said that it would prefer the new arrangements to continue and expand.

The BJPs election manifesto had hinted at a revamp of the agency that is seen as a legacy of Indias socialist past. It had said that the Centre should only be an enabler and facilitator for state governments.