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P LANNING P ARADIGM
What Do We Want
Them to Do Now?
Instead of dismantling Planning Commission
which will demolish substantial intellectual
capital, the roles of the Planning Commission
need to be redefi ned in order to prevent it from
being a non-performing government offi ce
Amal Sanyal
Department of Accounting,
Economics and Finance
Lincoln University, New Zealand
The central place of the Planning
Commission in the
Indian economy is being
slowly but surely taken over
by markets. Since the reforms started,
economic policy has been trying to give
markets more power in resource allocation
except where signifi cant externalities
are involved. As a result, major tasks of
the Planning Commission are gradually
being assumed by markets. The transition
of course faces hurdles and is occurring
bit by bit as consensus is reached on individual
elements of policy. But it is expected
that eventually markets will be
established in resource allocating position
in most areas. This raises questions about
the relevance of the Commission in the
new environment and calls for possible
change in its role.
Any proposed change in the role of the
52 THE IIPM THINK TANK
Planning Commission will have ramifi cations
beyond the Commission itself. They
will have widespread effects on the functioning
of business and the economy. As
the Commission loses its central role in
resource allocation, the so-called commanding
heights of the economy would be
controlled more and more by private business.
In the new situation some of the
existing tasks of the Commission would
become superfl uous. The nature of the
private sector’s interaction with the government
will adjust to the new conditions
creating new channels and rules of engagement.
Further, the Commission’s
strategic position in approval and clearances
built up over the years may produce
obstruction rather than help. Anticipating
these developments, a probable suggestion
could be to dismantle the Commission
altogether and distribute any remain-
ing duties to relevant ministries. But the
Commission has a substantial pool of
expertise on the economy, infrastructure,
technology and social services, and a
stock of experience and information.
Disestablishing the Commission would
destroy this substantial intellectual capital.
Secondly, the Commission networks
with a large number of institutions all over
India, and the social capital value of the
network is signifi cant. The networks will
continue to have utility in dealing with
social services, poverty, rural job creation,
community development, ecology and
environment; and managing inter-institution
relations. Given this, I would suggest
that we neither dismantle the Commission
nor allow it to degenerate into a nonperforming
government offi ce. We should
instead make the best possible use of the
intellectual and social capital accumu-