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Prime Minister Narendra Modi has a point when he says that India’s 60-year-old Planning Commission does not carry the spirit of ‘cooperative federalism’. The commission’s constitution and reporting structure makes it a Central body, which oversees and ‘approves’ the annual budgetary plans of state governments. As a former chief minister, Modi has had ample opportunities to experience this first-hand.
Historically, the commission has always been steered by the prime ministers of the day. Apart from being the ex-officio chairperson of the commission, the PM has been choosing his deputy (the functional head), and the commission’s expert members. In that sense, the very nature of the constitution and the role of commission were against the spirit of ‘cooperative federalism’.
Further, calls for revamping the commission is not new. Experts had recommended this several times in the past, and the previous UPA government had almost initiated the process.
Seen from this context, it was not surprising that Modi met the chief ministers (Omar Abdullah and Mamata Banerjee stayed away) in Delhi on 7 December to discuss the name, structure and role of the new body. While the majority favoured a change, some CMs wanted the commission revamped. Modi is in favour of scrapping the commission and creating a new institution.
It will be interesting to see the extent to which Modi will consider the suggestions that came from the chief ministers. Take, for instance, the suggestion that came from Manik Sarkar, chief minister of Tripura. He wants the commission to be set up by the National Development Council (NDC) or the Inter-State Council (ISC) and not the Prime Minister. He also wants as many chief ministers of states among its ex officio members as central ministers, and the selection of expert members to be on the basis of a consensus reached through consultations between the Centre and the states, and ratified by the NDC (or ISC).
The suggestion from Uttar Pradesh chief minister Akhilesh Yadav was equally interesting. He called for allowing full freedom to states for executing projects, dividing the assistance available with central government departments among states in a transparent manner and handing over a minimum 50 per cent of the central plan outlay to states as one-time amount. He also sought a minimum of 90 per cent subsidy amount due to a state in all centrally-aided projects.
One way or other, all the suggestions hint at the need to let go of the absolute powers the commission’s current structure vests in the PM. The political implications of such a decision could be uncertain, but it will certainly help the new body to function in the spirit of ‘cooperative federalism’.
(This story was published in BW | Businessworld Issue Dated 12-01-2015)