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ing on broad planning issues only. The main reason behind the writing off of planned economy body is the way today consumers react in a market-oriented system. In a market economy, where free price system dominates, centralized planning fails to recognize and track consumer preferences, and thus fails to co-ordinate production. This problem was also dis- cussed by economist Ludwig von Mises as economic calculation problem and economist János Kornai as shortage economy theory. Centralized planning also fails to address issues of surpluses, effi ciency and competitive pricing. Central planning system is less likely to encourage innova- tion compared to a free market system. This is evident from the way the US made advancement in science in technology even during cold war in spite of being economically weaker than the Soviets. Economist Robin Hahnel extends the thought and explains, “Combined with a more democratic political system, and redone to closer approximate a best case version, centrally planned economies no doubt would have performed better. But they could never have delivered economic self-management, they would always have been slow to innovate as apathy and frustration took their inevitable toll, and they would always have been susceptible to growing inequities and ineffi ciencies as the effects of differential economic power grew. Under central planning neither planners, managers, nor workers had incentives to promote the social economic interest. Nor did impending markets for fi nal goods to the planning system enfranchise consumers in meaningful ways. But central planning would have been incompatible with economic democracy even if it had overcome its information and incentive liabilities. And the truth is that it survived as long as it did only because it was propped up by unprecedented totalitarian political power.” Coming back to from where we started, the whole debate on transforming the Planning Commission to Systems Reform Commission does hold a lot of rationale. The commencement of transition should not be too fast and sudden as it may lead to wastage of resources and give rise to dead-lock among ongoing project. The transition should be gradual and the intervention of the state should not be lifted at one go. There should be minimum regulatory involvement, particularly where common resources are concerned. In order to make sure our ministries have sound assistance from policy experts at all levels, involvement of technocrats would be a requirement too. This will not only allow I NTEGRATED PLANNING The transition should be gradual and the intervention of the state should not be lifted at one go fl exibility but will also increase the use of latest technology (which today is not use extensively); besides it will also introduce the plan panel to internationally practiced standards. Moreover, along with all this process in place, it must be made sure that the information fl ow is very transparent and accessible. In order to gain trust and acceptance of majority (from various stake holders) the planning process should have provision of disclosure of information. This will also help the market to function without any major hiccups and will also reduce the probability of market failure. The planned agenda should further be audited by an independent third party body (may be Comptroller of Auditor general aka CAG) to check the feasibility of the project. With Planning Commission moving towards more indicative planning than directive planning, it makes less sense for states to follow the conventional model of planning model. In the era of market economy, the state has to realize that its emphasis and priorities needs a change. The conventional role of state are (were) Planning, Promotion, Regulation and Production, but with change in economic model the state should focus more on planning and production rather than regulation. The problem here is not with the process but with the system that defi nes the process. Afterall, when a system fails, it is not enough to just fi x the pipes but the institutions that fi x the pipes. (The views expressed in the write-up are personal and do not reflect the offi cial policy or position of the organization.) THE INDIA ECONOMY REVIEW 11
P LANNING P ARADIGM Central Agency in With the changing role of the state in a globalised world, planning process in democratic country like India calls for ‘planning as persuasion’ where different voices get rightful place than being made into ‘abstract citizens’ to attain neutral planning Just like the function of painting dramatically changed after the invention of photography, the function of planning too drastically changed after the State has redefi ned its role in relation to market and civil society in a globalised world. There is no suggestion to do away with planning (see Stiglitz 1997; Bagchi 2007). Rather, creative use of older paradigm of planning means not merely ‘seeing like a state’ (Scott 1998), but also planning after ‘seeing like a household’, ‘seeing like a market’ and ‘seeing like a collective’ all at the same time. Some authors (see Wade 1990) have argued that where there is a synergy of such different ‘sights’ through division of allocation decisions between market and the State, growth is more likely to occur. This paper aims to spell out the rationale for a new type of planning in democratic society like that of India, which could be termed as ‘planning as persuasion’. Neutral Planning for Political Masters Valuation is at the heart of policy making. Value-confl icts also refer to equity as the goal of public policy. Is there neutral planning when equity is the goal? It is good to be reminded of the history of Planning Commission to answer this. Ideological 12 THE IIPM THINK TANK confl icts between Gandhians and Nehruvians in the pre-independence period (that time to go after industrialization or not) resulted in the formation of National Planning Committee in 1937 (Chatterjee, 2001: 273), in the hope that such ‘neutral’ committee would be able to fi nd a workable path despite of ideological controversies. The committee reemerged as Planning Commission after independence. Vibrancy of democracy is the existence of different voices. Once these different voices are made into ‘abstract citizens’ a neutral planning is achievable. Fortunately, different voices in our country have not chosen to make the ‘exit’ option. That has made planning a challenging affair. Guha (2008) has argued that ideological divisions in the Indian society determine the nature of scientifi c inquiry in this country. There is no reason to believe that intellectual space exists apart from ideological orientations. As ideological divisions are deeply political, the ‘positioning’ in fact saturates any intellectual space. Valuations are entrenched in such ideological divisions. This has macro level applications at the decision making level for policy, also at micro level of policy implementation since policy performance is also dependent on the set of beliefs, values and judgments of participants. Reason-dominated planning has been the hallmark of modernity, and such rational determination in the planning process “…must know the physical resources whose allocation is to be planned, it must know the economic agents who act upon these resources, know their needs, capacities, and propensities, know what constitutes the signals according to which they act, know how they respond to those signals.” (Chatterjee 2001: 281). There is always a lot of residue while technocratic planners gain such information. Such residue works as politics outside the political process upsetting the plans. A lot of what is attributed as ‘implementation defi cit’ is actually design failure. Free market propagators such as Friedman believed when planning is completely left to market such residue does not exist, since local people know what is best. Such thinkers, therefore, believed that hope for India is not from big industrialists or government planned public sector units, rather from street-level entrepreneurs who had perfect information about local realities. But, we may argue a planning that leaves space for such entrepreneurs is still desirable. There are two options for planning here. One, ignore ideologies and pronounce like Clinton’s presidential cam-
Page 1 and 2: THE INDIA ECONOMY REVIEW Volume VII
Page 3 and 4: IIPM: THE FUTURE IS HERE Since its
Page 5 and 6: CREDITS Founder Dr. M. K. Chaudhuri
Page 7 and 8: P LANNING P ARADIGM In the State of
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Page 13 and 14: P LANNING P ARADIGM paign in 1992:
Page 15 and 16: P LANNING P ARADIGM The Complexity
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Page 21 and 22: crises. This note contends that the
Page 23 and 24: proximately 25% of the then global
Page 25 and 26: process of economic growth. Newly d
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Page 31 and 32: in such times. The other institutio
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Page 39 and 40: I NTEGRATED PLANNING The experience
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The second revision lowered the wei
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Domestic Product not only fl uctuat
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P LANNING LA LANNI NNING NG P ARADI
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P LANNING P ARADIGM nomic growth ra
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P LANNING P ARADIGM Commission play
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P LANNING P ARADIGM Whither Economi
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P LANNING P ARADIGM achieving “mo
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P LANNING P ARADIGM Table 3 . Inves
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P LANNING P ARADIGM 80 THE IIPM THI
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P LANNING P ARADIGM matic character
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P LANNING P ARADIGM Resource Data M
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P LANNING P ARADIGM Don't Throw the
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P LANNING P ARADIGM dynamic and the
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P LANNING P ARADIGM Commission from
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P LANNING P ARADIGM Commission has
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P LANNING P ARADIGM A Tale of Two C
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P LANNING P ARADIGM After the elect
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P LANNING P ARADIGM The Road to Pro
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P LANNING P ARADIGM rather through
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P LANNING P ARADIGM The road to hig
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P LANNING P ARADIGM From State to D
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P LANNING P ARADIGM began by taking
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P LANNING P ARADIGM leadership in B
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P LANNING P ARADIGM Unhealthy Plann
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P LANNING P ARADIGM made for enabli
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P LANNING P ARADIGM too failed. The
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P LANNING P ARADIGM quality of care
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P LANNING P ARADIGM 118 THE IIPM TH
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P LANNING P ARADIGM out of its reve
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P LANNING P ARADIGM Also, a good nu
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P LANNING P ARADIGM 124 THE IIPM TH
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P LANNING P ARADIGM sectors which a
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P LANNING P ARADIGM concurrent resp
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P LANNING P ARADIGM Is Big Dam a Pl
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P LANNING P ARADIGM dams in Arunach
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P LANNING P ARADIGM to enter on the
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P LANNING P ARADIGM Where's Natural
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P LANNING P ARADIGM tions there are
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P LANNING P ARADIGM livelihoods are
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P LANNING P ARADIGM Plundered Histo
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P LANNING P ARADIGM hierarchy of th
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P LANNING P ARADIGM the trend. Faul
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P LANNING P ARADIGM were employed.
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P LANNING P ARADIGM cies the govern
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P LANNING P ARADIGM the electricity
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P LANNING P ARADIGM start when cont
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P LANNING P ARADIGM Durg district.
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P LANNING P ARADIGM major provision
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P LANNING P ARADIGM image of their
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THE HUMAN FACTOR OTHER IIPM JOURNAL
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“Thank you very much for sending
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