This blog is a response to the comments made by Shri Bibek Debroy in the Economic Times on 5th January 2015, raising several important questions about the newly formed Niti Ayog. The link is at http://blogs.economictimes.indiatimes.com/policypuzzles/seven-questions-about-niti-aayog-that-modi-govt-should-answer/. It is a very perceptive piece and raises the very issues that should have been discussed threadbare before the announcement of the Aayog.
My quick response is here:
The setting up of the Planning Commission was at a time when the country was taking its first steps forward. Nearly every State was a congress-led State and the word of Pandit Nehru was final and unquestionable for the Chief Ministers, although there may have been some notable exceptions. In a way, the country was marching to a single drum-beat.
With the evolution of coalition and regional politics, that picture changed: the definition of a State’s aspirations changed; local desires and ambitions started gaining the upper hand over clearly identifiable national goals, in so far as development was concerned. Kerala and West Bengal were early examples, speaking a language very different from that of the Congress. And then, before the Emergency, and thereafter, there was a proliferation of political parties that knew the way in which they could take control of emotion and parochial feelings and, soon, lo and behold, there was a multiplicity of parties that sought to grasp the space of polity at the Central and state level.
It is in such a context that the Planning Commission soon became an irritant for many of the States led by the non-Congress parties, and soon enough – as disenchantment is contagious – by the Congress states as well.
The fact is, that in recent times, the Planning Commission had become merely an aggregator of facts and figures. In the annual Plan exercises, many of which I have attended, the concerned Secretaries to the State Government, used to attend meetings chaired by officials of the Planning Commission. In fact, much before such meetings, the State Government used to identify all its resources and allocate to each Department the maximum funds that it can provide. The kitty for each dept. includes the State funds, the GoI funds, other capital allocations etc. The Ministries in the Government of India have, also by this time, worked out the funds available to each of them for further allocation to the States, based on a number of criteria, including expenditures made, savings, performance, and achieving of some conditionalities, basically reform-based. So when the State level plan finalisation meetings are held at the Planning Commission, all the home work has been done. If there is any gap in the resources required for the annual plan and the availability of funds, then the State grandly announces that the gap will be made good by better tax administration and reduction of unnecessary expenditure. The role of the Planning Commission is virtually that of putting together all these facts and figures. There are hardly anything substantial or relevant that the Commission provides. The State provides its funds, the GoI its allocation and the Planning Commission its seal of approval!!
Next comes the big photo opportunity when the Chief Minister goes to the Planning Commission for the formal meeting with the Dy Chairman. Be assured, that everything has been worked out well in advance. The size of the annual Plan is well known to the officials before this final high level meeting. Certainly, the Chief Minister makes a presentation about the State’s aspirations and lists out various issues they face with the Central Government. Often representatives of the Ministries are present in these meetings. The concerned Member of the Commission, who has been given charge of the State for overall purposes, does make some perceptive comments. The Dy. Chairman also addresses the meeting. And then the formal announcement of the size of the State’s Annual Plan is made. The only discretionary funds available with the Planning Commission is about 80-100 crores for each State, which can be allocated by the Planning Commission directly to the State as a largesse, on the request of the Chief Minister. So in a plan size of, say for a State like Rajasthan for 2013-1014, of Rs 40,500 crores, the sum of Rs 80-100 crores is but a pittance. But the size of the Plan is politically important for the party in power in the State, as it can score brownie points as to how the Plan of the State has increased in their tenure and, by how many percentage points, and how the State has been able to argue and defend its position regarding the need for additional funding to the Planning Commission.
This is not to demean the status and role of the Planning Commission. In fact, some powerful Dy. Chairmen of the Commission are able to influence the decision making in Ministries by urging them to allocate more funds for a particular State or for a particular Scheme. Sometimes, in the framing of new schemes, the Planning Commission can give some special inputs. It is also essential to point out that the Central Ministries are very reluctant to hand over any authority or say in the allocation of funds for States or schemes to another body outside the Ministry. I would say, rightly so, since the Ministries are directly responsible to the Parliament (and not the Planning Commission). More importantly, some powerful Chief Ministers, (especially those who are responsible for holding together a coalition government at the Centre: Shri Chandrababu Naidu being the best example!!) have been able to get funds for their respective States far in excess of what they would have otherwise got, had the Planning process as specified by the Planning Commission had been explicitly followed.
Indeed, in the sense that the Planning Commission is a national body to advice the Government of India and the States on long term vision for the country, this role has been sadly missing over these past many years. It had perhaps served its purpose in its early days when the nation was establishing national infrastructure and setting up the sweeping policy framework to take the nation forward. But those days are over now.
The moot question is whether Shri. Bibek Debroy, whose article mentioning the seven questions he raised about the Niti ayog appeared in the newspaper with dateline 5 January 2015, and who was appointed a full time member of the Niti Commission by orders of the Government of India on the same day, could have embarrassed himself, or caused embarrassment to the Government of India, because of the said article!! Perhaps he now has the time and the opportunity to answer the same seven points himself.
As to whether I can attempt some answers, I shall try.
1. Was the Planning Commission able to protect Plan Expenditure in the past? Who will do that role in the future? I do not believe that the Commission had that kind of clout to protect Plan expenditure to the extent envisaged in the article. In these matters, the Finance Minister is God himself! The lobbying by the Commission with the Ministries was limited, and to the extent of personal intervention of the Chairman and Members of the Commission with the Ministers or even the Secretaries to the Government of India. As I said, the Chief Minister concerned was more effective in garnering funds for the State by his own clout and influence.
2.The role of the Finance Commission? This will continue to be what it currently is: to recommend the sharing of revenues of the Government of India with the State Government as per the provisions of Article 280 the Constitution. It remains for non-plan expenditure and shall continue to do so. The GoI cannot contemplate that Plan Expenditure shall also be the domain of the Finance Commission, simply because none of the Union Minsters will contemplate any arrangement that dilutes their authority and power, discretionary though they may at many times.
3.As regards Centrally Sponsored Schemes, they were, and are, majorly in the domain of the Ministries: and the role of the Planning Commission was at best advisory. Allocations to the Special category States will continue to be with the GoI though the Planning Commission could advice the Ministries on the same.
4.The Chaturvedi Committee (chaired by Shri Chaturvedi, former Cabinet Secretary and until recently full time member of the Planning Commission) had suggested merger and rationalization of the various CSS-s. Even this report could not be implemented because the Ministries had their own opinions in the matter and they were unwilling to be persuaded otherwise, even though we all knew that there were important discrepancies in the Schemes, overlaps and need for rationalization.
5.My views above at pt no 4 cover this fifth issue also. I do not see any CSS-s being decentralized or ‘modi’fied as per the new Niti’s guidelines. I do not see any CSS-s being scrapped. At least not for the time being. Yes, the breath of fresh air that Shri Pangariya could bring, may make profound changes, but this is likely to take time. Again I do not see any major change, because the Ministries, led by politicians, are very wary of giving away their powers to any outside bodies.
6.The new Niti Commission, like its predecessor the Planning Commission, is not a statutory body, but has been set up by administrative orders. If it were a constitutionally created body, or if it were set up by a statute, then things could have ben different. Perhaps that may come soon: yes, then indeed, there will be changes! As Bibek Debroy indicates, this is a moot question to be considered by the Government of India, if it wishes to give the new Commission clout and teeth.
7.I think that the merger of certain long-standing outdated monolithic structures such as the Inter-State Council, the National Development Council is quite salutary. I have attended several meetings of the NDC as representative of the State Government of Rajasthan, where each Chief Minister, depending on the colour of the party he belongs to, either applauds or condemns the Government of India. Sometimes the language employed can be quite offensive. Yet, the resolutions of the NDC are passed and nobody was either happy or disconcerted. Published proceedings of the NDC are filed away and forgotten until the notice for the next meeting is received!
I am writing these comments above in the sanguine hope that the new Commission will bring a difference in the manner we see this country, giving national priorities it’s rightful and predominant place while at the same time, respecting the aspirations of the individual States. The task is huge and in a multi-cultural, plural, diverse country, with its ‘million mutinies’, it is fraught with danger and pitfalls.
Certainly, I am not expecting any body to respond to this note: but, I thought it fit to record my comments since I have long been associated with the process of Planning at the State level. If the purposes and functions of the new Niti Commission had been thought through, and set up after a national debate, it would have had more solid foundations and greater chance of success. Nevertheless, hope springs eternal in the human heart. And as a concerned individual citizen of the country, I wish it all the best.