The Telegraph
Sunday , August 17 , 2014
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Plan panel’s tale of failed reform bids

(Top) Montek Singh Ahluwalia and Arun Maira

New Delhi, Aug. 16: Prime Minister Narendra Modi’s decision to dismantle the Planning Commission has led to revelations from some of the body’s former stalwarts about past attempts to reform the Soviet-era institution that were repeatedly thwarted, culminating in a tense farewell for Manmohan Singh last May.

The panel that has steered India’s economic management and vision for 64 years without any constitutional mandate has needed radical surgeries for years but was instead kept alive on painkillers, former members who count among India’s top economists have suggested.

Former Planning Commission deputy chairperson Montek Singh Ahluwalia told The Telegraph today that he had written to Manmohan Singh in the final weeks of UPA II rule proposing a series of reforms to the body.

Singh, in his final meeting as chairman of the plan panel, too had indicated that the body needed to evolve, multiple members present then confirmed.

“I stand by my note to the then PM,” Ahluwalia said, adding he did not want to comment on the possible replacements for the commission.

But Ahluwalia and Singh are themselves partly responsible for the agency’s failure to reform, especially over the past five years, said the former India head of the Boston Consulting Group, Arun Maira, who was a Planning Commission member between 2009 and 2014.

“Four years back, we had a blueprint ready to transform the body to what was needed today,” Maira said. “The PM himself agreed to it, but neither Dr Singh nor Dr Ahluwalia could push its implementation and, as the leaders, frankly must take a part of the blame.”

In 2010, the Planning Commission had realised it desperately needed reforms and begun detailed consultations with state governments, industry leaders and various central government arms.

Four key ideas emerged from the brainstorming sessions, according to Maira and multiple others present then.

First, the commission concluded, it must become a slimmer body, acting as a node connecting multiple expert agencies rather than a behemoth claiming to be the final word on all domains.

“The body had become filled with IAS officers,” said JNU economist Abhijit Sen, who was a commission member from 2004 to 2010.

Second, it was suggested the panel should dump the process of rigid planning for five years at a time a dynamic world was forcing the adoption of constant changes. It was felt the commission should instead work on what economists call “scenario planning” — preparing possible solutions for different economic scenarios.

The third idea was that the panel should facilitate state governments’ delivery of projects to their people rather than dictate to them what they should do.

“Quite frankly, states - and not the Centre - have emerged as the fountainheads of innovation in our country,” said Mihir Shah, Planning Commission member from 2009 to 2014.

“And there’s a case for giving them a block grant and then letting them use it the way they deem fit, and then evaluating physical outcomes, rather than dictating how they should spend it.”

Finally, it was suggested the plan panel needed to develop the skills to act as a coordinating agency between the multiple stakeholders - the Centre, state governments and the private sector, among others -- involved in any major project.

Singh and Ahluwalia agreed to the four-point reform blueprint, Maira said, but the document remained unimplemented over the next four years.

On April 30, when Singh told the commission’s final meeting under him that the body needed to change with the times, what was a farewell speech drew responses from members that pointed to their frustration.

“We told him that we’d done all the preparatory work for reforms, that you were given the answers, but that nothing had been implemented for four years,” Maira recalled. “And we requested that the blueprint for reform be at least placed before the new government.”

But the struggle - mostly futile --- for change at the commission predated Singh’s tenure. Alongside its hyper-controlled planning through its early decades, the commission also engaged in long-term strategic planning across key sectors, economist A. Vaidyanathan said.

That was the panel’s real strength during the 1960s and 1970s, when it dominated India’s economic planning, said Vaidyanathan, who was a Planning Commission member just before the 1991 reforms and had worked at the institution since 1964.

With the reforms came a shift in the understanding of the commission’s role. In 1997, at the end of the eighth Five Year Plan, the panel declared: “The emphasis on the public sector has become less pronounced and the current thinking on planning in the country, in general, is that it should increasingly be of an indicative nature.”

A shift from a prescriptive to an indicative role for the commission would have needed strategic planning even more. But the shift never occurred, said a report published in July by the Jaipur-based think tank, CUTS International Public Policy Centre.

“And the Planning Commission lost all the strategic planning component of its abilities,” Vaidyanathan said. “With that, if you ask me, the commission atrophied.”