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P LANNING P ARADIGM
like funding, incentive, institution design
and targeting need to be sorted out. For
this, available models of management and
organisation for using the private sector
in a public non-market context need to be
improvised for Indian conditions.
Quite apart from all these, we have to
improve governance and redistributive
services, which are produced and delivered
through government agencies outside
the network of markets. As is wellknown,
they are characterised by colossal
ineffi ciency, insensitivity and corruption.
We cannot claim a place in today’s world
until these deliveries are radically transformed.
To resolve the issues of fairness
and effi ciency in all these areas — externalities,
public goods, merit goods, governance
and redistributive services — is
a gigantic task. Here is an illustrative list
of issues involved.
• The supply of merit goods, and those
services that have both private and
public goods character have a common
set of concerns. For education, literacy,
health etc we need to determine the
appropriate domains of public and
private operation. Next is to decide on
the right amount of public provision –
quantity-wise and cost-wise. We need
to develop an acceptable norm for
central and state governments’ relative
share of costs. Further, we need to cut
through the ad hoc designs of existing
programs and establish effi cient designs
of delivery. The designs must
consider (i) incentive for public delivery
workers- e.g. incentive for rural
school teachers and health workers; (ii)
incentive for the recipients to accept
the service e.g. for households to send
children to school and immunise children;
(iii) effective targeting at least
cost; and (iv) quality assurance.
56 THE IIPM THINK TANK
• Environment, forests, wild life, river
and marine resources; ecology in general:
We have a set of regulations introduced
by different authorities at different
times without co-ordination. Little
thought has been given to the question
of incentive of economic agents to
abide by the regulations. Multiplicity of
authorities makes enforcement ement opaque
and prone to corruption. . Nor can responsibilities
be fi xed. The he tasks here
are to set up incentive-compatible
-compatible
regulations; establish mechanisms chanisms that
might hold some corruption tion in check;
and design e-governance ce that might
lock some evasion and deals. eals. There is
also the need to simplify y the regulations
and in each case get et a single authority
to handle them.
• For redistributive services ices like 100
days’ work, various rojgar gar programs,
mid-day meals etc: We have ave to design
methods that address delivery elivery to the
targeted benefi ciaries, ensure nsure that the
allotted funds are spent, , ensure that
the benefi ciaries are not ot cheated of
their entitlements.
I do not claim that these issues ssues are new.
Economists, planners and d the government
have remained aware of them and
have worked on them. The problem roblem is that
the methods used in the past are seriously
wanting in the new milieu. They
emerged in the context of central planning,
import substitution and d an environment
of distrust of private business. usiness. They
were infl uenced by the pulls and pressures
of supply lobbies, state governments, rnments, local
actors and central ministries. ries. Further,
activities in these areas being ing state subjects
or joint subjects, they have been infl
uenced by the politics of f centre state
relations. Arguably, regulations ons and institutions
grew as response to the politics of
the day rather than economic and social
problems. Needless to say, they would fail
to serve in the new environment.
Why Planning Commission?
Just as we are seeking industrialisation
and higher growth, we are also seeking to
eliminate absolute poverty. Industrialisa