Manmohan Singh

New Delhi, Aug. 1: When Planning Commission deputy chairman Montek Singh Ahluwalia met Bengal chief minister Buddhadeb Bhattacharjee while on a visit to Calcutta two weeks ago, it was not just a one-off “courtesy” call. The commission, government sources said, is expected to act as a kind of “economic interface” between the Centre and the states.

The plan panel, under the United Progressive Alliance government, is once again set to play the kind of interventionist role it had when it was created, the sources said.

“The commission will be the Prime Minister’s personal economic think tank,” said a source, pointing out that Singh handpicked not just Ahluwalia, but also the other members.

The panel will not only concern itself with the allocation of funds to states, but also determine the criteria on which they will be made — the fiscal performance of the state being the most important — and closely monitor how the funds are being used and if they are at all.

Singh’s idea of a more centrestage role for the Planning Commission came after a re-look at the role of the state in the post-liberalisation era, sources said.

“Once the process of liberalisation was steamrolled on the country, the commission’s importance got undermined and it was reduced to being a dumping ground for failed politicians. The focus was on reforms and disinvestment and the public sector, and the social sector were looked at with contempt. The concept of holistic economic planning was given a go-by,” said a source.

“But the role of the state, especially in social areas, is being revisited by the very countries who have done the gamut of reforms, because of the perception that the poor and the rural sectors have not got a fair deal,” explained the source.

The Prime Minister, who is apparently out to reinvent his image from being the author of liberalisation to a friend of the poor and the farmer — to respect the “spirit” of the 2004 election verdict — is also keen that the commission reflect his own priorities. “These are water, drinking water, the havoc caused by flood water, food, drought and education. These are uppermost on his mind,” said a source.

As an example of Singh’s obsession with these areas, sources pointed out that for the first time in the PMO’s existence, the secretary of the drinking water department visited Singh’s office — not once but several times. Some PMO officials were unaware that such a department existed.

Sources said that while the Congress-led government at the Centre had nothing against, say, the privatisation of infrastructure, Singh was clear that “no business house would like to invest in roads for Dalit bastis” and it was the “duty of the state to see this was done”.

Asked if the commission’s pro-interventionist role could lead to a conflict of interests with the finance ministry, sources quoted an address by finance minister P. Chidambaram on July 27 at a function in which Ahluwalia was also present.

“(The) Planning Commission is now engaged in an exercise of rearranging the priorities and allocating the additional Rs 10,000 crore that have been provided in the budget,” Chidambaram reportedly said.

The finance minister indicated that the priorities were education, the launch of the mid-day meal scheme, the food-for-work programme and an eight-fold increase in health and education spending aimed at those left out of the economic boom.

Ahluwalia, who was reviled by the Rashtriya Swayamsevak Sangh and the Swadeshi Jagran Manch for his “pro-MNC bias”, stated: “We are mainly focusing on how to rearrange the government’s planned expenditure during the next two years so that farmers get the maximum advantage with an increase in productivity.”