The 64-year-old Planning Commission, a vestige of the socialist era, will soon become history.
Prime Minister Narendra Modi, in his Independence Day speech, today announced that the Commission, set up in 1950 at a time when government gave public sector the commanding heights of economy, would be abolished and replaced with a more relevant institution.
Greatly impressed by the Soviet planning system, the country's first Prime Minister Jawaharlal Nehru had set up the Planning Commission to steer the nation's economic destiny.
Set up by a Cabinet Resolution, the Commission enjoyed immense power and prestige as it had always been headed by the Prime Minister. Its most important function was to fix targets for sectoral growth and allocate resources to achieve them.
The Deputy Chairman of the Commission has often been a political stalwart holding the rank of a Cabinet Minister. The stalwarts who had been the deputy chief of the panel included Gulzarilal Nanda, V T Krishnamachari, C Subramaniam, P N Haksar, Manmohan Singh, Pranab Mukherjee, K C Pant, Jaswant Singh, Madhu Dandavate, Mohan Dharia and R K Hegde. The last deputy chairman was Montek Singh Ahluwalia.
The Soviet-era style planning body, however, lost its relevance after the opening of the economy in the 90s. With the dismantling of the licence raj, it functioned only as an advisory body without any effective power.
"We will very soon set up a new institution in place of Planning Commission...The internal situation of the country has changed, global environment has changed...We need an institution of creative thinking and for optimum utilisation of youth capability," Modi said in his Independence Day address.
