An advisory council?

Planning Commission should make way for independent think tank

Prime Minister Narendra Modi hosted a meeting with state chief ministers over the weekend, where the future of the Planning Commission was discussed. The prime minister had declared as long ago as his Independence Day speech from the ramparts of the Red Fort on August 15 that the Commission would be disbanded. However, since then, there has been little clarity on what will replace it, if anything. As it happened, the meeting of chief ministers did not move the discussion forward as much as was hoped, either. One thing that did emerge from the Prime Minister's Office, somewhat typically, was a suggestion for a replacement name - "Team India". While it will naturally raise a few eyebrows, the name does underline the fact that Mr Modi will wish to position any replacement of the Planning Commission as something that is more deferential to the increasingly powerful chief ministers of states. This is, of course, not unrelated to Mr Modi's own experience as a powerful chief minister uncomfortable with the restraints of the Planning Commission. However, Finance Minister Arun Jaitley reportedly confirmed after the meeting that there was still no timeline on when the replacement body would be set up.

Essentially, the questions should be: what functions of the Planning Commission are still relevant? Which of those that are relevant can and should be farmed out to other bodies? And what additional functions should a new body take on? The old Commission had various duties. The basic perspective planning division is something that many agree is outdated, and no longer serves a major purpose. Even under the last government, as the prime minister emphasised in his meeting with chief ministers, the perspective planning process was sought to be modernised and dragged out of the 1950s. To the extent that this is the core of the old Commission's task, it should be just shut down. The projects appraisal division discharged the other main function of the Commission. This, too, should be phased out as this function can be discharged by ministries at the Centre or relevant departments in the states where such projects are to be located. Another function of the Commission, however, was to control the disbursement of central money. This has already been farmed out to the finance ministry in many ways, rendering the Commission toothless.

There are other functions, too. The Planning Commission often served as a referee between various stakeholders. First of all, between the Centre and the states - the problem being that, in the last decade in particular, it was seen as too biased towards the Centre. But also, it was a referee between states and between Union ministries. Indeed it often served as India's sole infrastructure regulator, questioning bad decisions that were being taken by powerful ministries. These are important functions, and should be hived off to other bodies. And an infrastructure regulator - a Bill for which was ironically drafted by the Commission - is overdue.

Finally, there is the question of providing relatively independent and long-term economic advice to a government chronically short of expertise. This is the direction in which the last dispensation also wished to take the Commission. The question here is whether a simple independent think tank is the best idea, or whether it should be replaced by an enhanced council of economic advisors within the Prime Minister's Office - or indeed by a reinvigoration of the economic service, and advisors placed within individual ministries. In general, the Commission's replacement should be the product of a realistic estimation of the problems of capacity in the government.