Download - The India Economy Review

P LANNING P ARADIGM
It is a moot question whether the
Commission can be transformed into
a Systems Reform Commission
This has long term implications for In-
dia’s teaming millions and brings into
focus the issue of “measurable growth
and meaningful growth”.
The Indian economy whose production
base was broadened and increased by rise
in demand from domestic consumers,
during the fi rst four decades of planned
development has certainly received in-
creased trade benefi ts from the external
orientation of policy and programmes in
the recent years. Along with these benefi ts
came the unavoidable impact of global
fi nancial meltdown in 2008-09. While the
nation benefi ted from the circumspect
policies pursued in capital account and
current account convertibility in moderat-
ing the impact of fi nancial melt down, the
downturn in major economies has cer-
tainly affected trade and is now having a
lagged effect on domestic employment
and income growth. This should be kept
in view while we discuss measures to sustain
high growth rate in the economy and
consider steps to protect different sections
of society.
Conclusions
While the sharp increase in the plan outlays
at the centre and the states have become
noticeable, there is continuing
concern over the issues of equity in redistribution
of resources and effi ciency in
utilization of resources, particularly, in
determining the respective shares of various
states in federal transfers. Public Finance
analysts have pointed out that resolving
tension between equity and
effi ciency is a fundamental challenge in
66 THE IIPM THINK TANK
public policy. In the federal context, this
creates a dilemma for those interested in
the task of adjucating the transfer of federal
funds to the states.
What is signifi cant and should not be
missed by any one is that in India, the
pressures of economic growth and fi nancial
management are inextricably intertwined
with social and political objectives
of governance. Rate of growth is to be assessed
along with its quality, and distribution
equity. That has been the sheet anchor
of our development planning. Reiterating
this, in his address to the nation on June
25th 2004, the Prime Minister Dr. Manmohan
Singh had observed that “Equity
and effi ciency are complementary, not
contradictory, and we must move forward
on both these, while maintaining a high
degree of fi scal and fi nancial discipline
and a robust external, economic profi le”.
The Prime Minister also observed that “at
a regional level the disparities are high and
while some regions of the country seem to
be on an accelerating growth path, there
is a concern that other regions are not only
lacking but are also falling behind” and
that “as a nation we cannot accept such
disparities”.
Makeover of
Planning Commission?
Given the benefi t of experience of formulation
and implementation of development
plans of over six decades, we should
be ready to consider various suggestions
for a makeover of the Planning Commission,
in so far as its contribution to the
sustained and inclusive growth of the
economy. It is however a moot question
whether the Planning Commission can be
transformed into a Systems Reform Commission
for resolving the extant systemic
problems as proposed by some. For one
thing the Planning Commission as it is
constituted now, lacks statutory stature
and its present composition with a dominance
of Delhi based and Union centric
economists and bureaucrats does not lend
it much credibility. On the other hand
there are genuine apprehensions among
States regarding the content and quality
of its prescriptions. This in itself may be
a good ground for the makeover of the
Planning Commission. However timing
acquires signifi cance. At a time when
questions are raised about the domains of
the Constitutionally empowered Judiciary
the Legislature and Executive and
there is an overhang of uncertainty, the
scope for Planning Commission to metamorphose
itself into a Systems Reform
Commission must be considered limited,
unless the nation is got prepared and
ready to effect Constitutional amendments.
That does not appear to be visible
on the horizon.
(The views expressed in the write-up are
personal and do not reflect the offi cial
policy or position of the organization.)